The purposes of this study were to evaluate the potential production of nitrous oxide (N2O), which is known as a greenhouse gas, to identify the reaction responsible for it and to examine the effects of oxygen and moisture content on nitrification, denitrification and N2O production. Applying a tracer method using a N-15-isotope into an oxygen controllable reactor with artificial refuse proved that biological denitrification was a main source of released N2O even when the oxygen of the bulk atmosphere was as high as 15%. Calculating the mass balance for nitrogenous compounds showed that only denitrification occurred as the sole microbial process when the bulk oxygen was 0-5%. With increasing oxygen above 5% nitrification also began to occur simultaneously with denitrification. As the bulk space of the refuse became aerobic, the total amount of N-2 produced from denitrification decreased but the proportion of N2O in the (N2 + N2O) increased. Denitrification was the main source of released N2O when the moisture content was between 40-60% and oxygen 10%. The amounts of nitrification, denitrification and Nz production increased as the moisture content increased.