【Objective】To combat the depletion of organic carbon and poor water-fertilizer retention in the Horqin Sandy Land, this study examines the mechanisms by which pelletized straw incorporation enhances soil organic carbon and its active fractions.【Method】Through a controlled incubation experiment, the study established treatments with different application rates of pelletized straw: a control with no straw addition (CK), 75 t·hm^-2 pelletized straw (PS75), and 150 t·hm^-2pelletized straw (PS150). Additionally, the experiment included duration treatments consisting of single-year application and two consecutive years of application.【Result】 Compared to the CK treatment, pelletized straw application significantly increased soil organic carbon (SOC) and total nitrogen (TN) contents by 217.52%～749.15% and 197.78%～679.25%, respectively. With increasing application rates and duration of pelletized straw incorporation, the carbon and nitrogen retention capacity of sandy soil was significantly enhanced. Application of pelletized straw consistently elevated the C/N ratio of the sandy soil, with the most significant increase observed in the PS150-1a treatment (P<0.05). Also, the addition of pelletized straw significantly enhanced particulate organic carbon (POC), mineral-associated organic carbon (MAOC), and labile organic carbon (LOC) contents (P<0.05). The contents of POC, MAOC, and LOC increased significantly with higher application rates of pelletized straw and longer amendment duration. Moreover, POC, LOC, and MAOC all showed highly significant positive correlations with total SOC content (P<0.01). Notably, the 150 t·hm^-2 pelletized straw treatment with two consecutive years of application significantly increased the proportion of POC to total SOC by 31.81% (P<0.05), suggesting a preferential accumulation of this active carbon fraction. Nevertheless, pelletized straw application significantly reduced bulk density while improving water-holding capacity and porosity in sandy soil. The study found a statistically significant positive correlation (P<0.01) between the water-holding capacity of sandy soil and the duration of pelletized straw application. Moreover, the improved water retention in sandy soils resulted from synergistic physical adsorption and chemically mediated retention from pelletized straw decomposition. According to redundancy analysis, soil physicochemical properties explained 98.90% of the variability in SOC, TN, and C/N. Besides, MAOC was the primary driver, highlighting mineral association as a fundamental mechanism for soil carbon and nitrogen stabilization. Partial least squares path modeling demonstrated that the cumulative addition of pelletized straw directly promoted SOC sequestration by significantly increasing the contents of both LOC and MAOC (P<0.01). The model further confirmed the dominant role of MAOC in SOC stabilization, highlighting the importance of mineral protection mechanisms for carbon retention in sandy soils. The accumulation of SOC significantly increased TN content (P<0.01), indicating a coupled carbon and nitrogen sequestration effect in the sandy soil. Furthermore, increasing the application rate of pelletized straw significantly reduced soil bulk density and enhanced water holding capacity (P<0.01). In summary, the study demonstrated that SOC fractions served as the key mediator for carbon-nitrogen coupled stabilization in sandy soils. The establishment of this regulatory mechanism provides a theoretical foundation for carbon sequestration management in arid sandy soils.【Conclusion】The study demonstrates that pelletized straw incorporation effectively enhances sandy SOC fractions, promotes carbon-nitrogen synergistic sequestration, and improves soil physical properties, with the optimal effects achieved at 150 t·hm^-2 with two consecutive years of application.