Microbial groups are major factors that influence soil function. Currently, there is a lack of studies on microbial functional groups. Although soil microorganisms play an important role in the nitrogen cycle, systematic studies of the effects of environmental factors on microbial populations in relation to key metabolic processes in the nitrogen cycle are seldom reported. In this study, we conducted a systematic analysis of the changes in nitrogen functional groups in mandarin orange garden soil treated with Azolla imbricata. The structures of the major functional bacterial groups and the functional gene abundances involved in key processes of the soil nitrogen cycle were analyzed using high-throughput sequencing (HTS) and quantitative real-time PCR, respectively. The results indicated that returning A. imbricata had an important influence on the composition of soil nitrogen functional bacterial communities. Treatment with A. imbricata increased the diversity of the nitrogen functional bacteria. The abundances of nitrogen functional genes were significantly higher in the treated soil compared with the control soil. Both the diversity of the major nitrogen functional bacteria (nifH bacteria, nirK bacteria, and narG bacteria) and the abundances of nitrogen functional genes in the soil showed significant positive correlations with the soil pH, the organic carbon content, available nitrogen, available phosphorus, and NH4 (+)-N and NO3 (-)-N contents. Treatment with 12.5 kg fresh A. imbricata per mandarin orange tree was effective to improve the quality of the mandarin orange garden soil. This study analyzed the mechanism of the changes in functional bacterial groups and genes involved in key metabolic processes of the nitrogen cycle in soil treated by A. imbricata.