Tropical and subtropical acidic soils are hotspots of global terrestrial nitrous oxide (N₂O) emissions, with N₂O produced primarily through denitrification. Plant growth-promoting microbes (PGPMs) may effectively mitigate soil N₂O emissions from acidic soils, achieved through differential responses of bacterial and fungal denitrification to PGPMs. To test this hypothesis, we conducted a pot experiment and the associated laboratory trials to gain the underlying insights into the PGPM Bacillus velezensis strain SQR9 effects on N₂O emissions from acidic soils. SQR9 inoculation significantly reduced soil N₂O emissions by 22.6–33.5 %, dependent on inoculation dose, and increased the bacterial AOB, nirK and nosZ genes abundance, facilitating the reduction of N₂O to N₂ in denitrification. The relative contribution of fungi to the soil denitrification rate was 58.4–77.1 %, suggesting that the N₂O emissions derived mainly from fungal denitrification. The SQR9 inoculation significantly inhibited the fungal denitrification and down-regulated fungal nirK gene transcript, dependent on the SQR9 sfp gene, which was necessary for secondary metabolite synthesis. Therefore, our study provides new evidence that decreased N₂O emissions from acidic soils can be due to fungal denitrification inhibited by PGPM SQR9 inoculation.