To explore effect of controlled release fertilizer (CRF) on yield of peanut and balance of available N in red soil mulched with rice straw, a field experiment designed to have six treatments, i.e. Treatment MF20 (M stands for mulching, F for fertilizer and the number for the proportion CRF accounted for of the total fertilizer applied, here 20%), Treatment MF40, Treatment MF60, Treatment MF0, Treatment CK1 (mulching only) and CK2 (no mulching in addition to split application of fertilizer), was conducted. Results show that Treatment MF20 was the highest, and similar to Treatment CK2, in peanut yield, show a declining trend with increasing proportion of CRF. Treatment MF20 was also the highest in apparent N utilization efficiency, reaching up to 57.39% and being 20.94% and 3.84% higher than Treatment MF0 and Treatment CK2, respectively, and in N agronomic use efficiency, partial productivity, N uptake efficiency and total nitrogen uptake, as well. All the proceeding indices declined with rising proportion of CRF, once beyond 20%, but the index of apparent N loss rate displayed a reverse trend. (ANLR) and the index of soil N surplus did, too. Based on the balance of soil available nitrogen in the test soil, the technique of halving the nitrogen application rate is an effective measure to tap the N fixing potential of the crop per se, to improve nitrogen fertilizer utilization efficiency while ensuring a stable high yield of peanut in the upland red soil mulched with rice straw.