The effects of hydraulic retention time (HRT) on the performance of algal-bacterial-based aquaponics (AA) were investigated in this study. Both the highest fish growth and algal biomass increase were observed in the AA system at 2-day HRT, resulting in the highest nitrogen utilization efficiency (NUE) (39.28%) in this microcosm. On the contrary, ammonia oxidation bacteria (AOB) abundance at 4-day HRT was approximately ten times higher than that at 2-day HRT, since longer HRT would benefit bacterial growth. The N-15 labeling study showed that microalgae assimilation was the main pathway of NH4+ removal in the AA system, and oxygen produced by microalgae could in situ support complete nitrification, thus leading to much lower NH4+ concentrations at 2-day HRT. Accordingly, better water quality was achieved at 2-day HRT. Considering all the factors, HRT of 2-day was considered to be optimal for the AA system.