Innovative management practices are required to increase soil fertility and to reduce nitrous oxide (N₂O) emission from agricultural soils. Spatial heterogeneity of N₂O flux is attributed to various soil properties associated with different management practices. N₂O flux is the result of integration of N₂O production, consumption, and transport processes within soil profiles. N₂O production, consumption, and transport processes varied markedly with depth near the soil surface. Variations of N₂O concentration were monitored at 7 cm, 15 cm, 30 cm, and 50 cm in depth along a soil profile (each monitoring point covering a range of 5 cm of soil layer) using an in-situ gas collection system under the rice-wheat annual rotation cropping system. The experiment was designed to have 2 levels of N application and 3 levels of straw incorporation, i.e. N0 (N 0 kg hm^-2 crop^-1) and N1 (N 250 kg hm^-2 crop^-1), and S0 (straw 0 t hm^-2 crop^-1), S1(straw 3 t hm^-2 rice crop^-1), and S2 (straw6 t hm^-2 rice crop^-1), forming four treatments, i.e. N0S0, N1S0, N1S1 and N1S2, and each treatment had 3 replicates. The observations, once a week over the two cycles of rice and wheat rotations from June 2010 to May, 2012 found that N₂O concentrations in soil profiles demonstrated a significant feature of spatio-temporal distribution for all the treatments. N₂O concentration peaked during the early growth stages of both wheat and rice, and then fluctuated slightly during the rest of the growth season; N fertilization significantly boosted the peak, while incorporation of rice straw, particularly in Treatment N1S2, lowered the peak. However, neither N fertilization nor straw incorporation affected seasonal dynamics of N₂O concentrations in various soil layers of a profile. During the wheat seasons, distinct N₂O concentration distributions were observed in the soil layers at 30 cm and 50 cm in depth. During the first wheat season, N₂O concentration in soil profile displayed a decreasing order of 30 cm ≥ 50 cm ≥ 15 cm ≥ 7 cm and during the second wheat season, 50 cm ≥ 30 cm ≥ 15 cm ≥ 7 cm; But during the rice seasons, N2O focused in the surface soil layers, at 7 cm and 15 cm, and followed an order of 15 cm ≥ 7 cm ≥ 30 cm ≥ 50 cm in both rice seasons. Soil N₂O concentrations in the three N fertilized treatments, N1S0, N1S1 and N1S2, were significantly higher than that in CK (N0S0). Particularly in Treatment N1S0, it was 2 to 3 times that in CK in all the corresponding soil layers during the two rice-wheat cycles (p<0.05). To the contrary, straw incorporation at a high rate significantly reduced N₂O concentrations in the near surface soil layers (p<0.05), but increased to some extent in the lower soil layers in the rice season. The findings indicate that N₂O concentrations vary markedly with depth in the soil layer between 0 and 50 cm under the annual rice and wheat rotation and that straw incorporation at a high rate markedly reduces N₂O concentration near in the surface soil layer. The underlying mechanism of straw incorporation reducing N₂O concentration in the surface soil layer requires further research.