Aims To explore if and how symbiotic Phomopsis liquidambari-rice system influences below-ground straw decomposition and then nitrogen(N) transformation in response to environmental N levels. Methods and Results Litter bag experiments were utilized to trace the decay process during rice growth phases (seedling (T1), tillering (T2), heading (T3) and maturing (T4) stage), with (E+) and without endophyte (E-), under low (LN), medium (MN) and high nitrogen (HN) supply. Litter, soil and plant samples were collected to evaluate the decay process, N transformations, plant quality and relative abundance of soil ammonia-oxidizing archaea (AOA), ammonia-oxidizing bacteria (AOB) and P. liquidambari. The results showed that straw decomposition increased by 19 center dot 76% (LN, T2 stage), 14 center dot 05% (MN, T3 stage) and 16 center dot 88% (MN, T4 stage) in E+ pots when compared with E- pots. Further analysis revealed that no significant endophyte x N interaction was found for straw decay rate and that the decay rate was reduced by a higher N supply (LN, 37 center dot 16 +/- 0 center dot 65%; MN, 32 center dot 27 +/- 1 center dot 72%; HN, 29 center dot 44 +/- 1 center dot 22%) at the T1 stage, whereas straw decay rate and N release increased by 9 center dot 38 and 11 center dot 16%, respectively, mainly by endophyte colonization at the T4 stage. The abundance of AOA and AOB were altered, corresponding with the decay rate. Soil mineral N, straw mineral N and plant quality were shown to increase in E+ pots, depending on environmental N conditions and growth phase. The yield increased by 2 center dot 98% for E+ plants under MN level. Conclusions Symbiotic P. liquidambari-rice system promoted below-ground straw decomposition and N transformation, depending on environmental N levels and plant growth phase. Significance and Impact of the Study This study provides evidence that fungal endophyte-plant systems are able to promote N transformation by increasing straw decomposition. A reasonable combination of N inputs could enhance its advantage in agriculture ecosystems.