<p>[Objective] This study aimed to evaluate the potential of transplanting-stage seedling-contact fertilization (CSF) with controlled-release compound fertilizer to increase rice yield and nutrient use efficiency, and to elucidate the underlying mechanisms involving soil nutrient transformation and plant nitrogen (N) metabolism. [Method] Field experiments were conducted in 2022 and 2023. Treatments included: no N (CK), conventional split N at 270&#xa0;kg N ha^− 1 (BH) and 180&#xa0;kg N ha^− 1 (BOPT), transplanting-stage seedling-contact fertilization at 180&#xa0;kg N ha^− 1 (CSF), and 90&#xa0;kg N ha^− 1 (50%CSF). Rice yield, N use efficiency, soil inorganic N dynamics, soil enzyme activities, and leaf N-metabolizing enzyme activities were measured. [Results] Compared with BH, CSF maintained similar yields, while 50%CSF reduced yield by 10.86–12.46%. Compared with BOPT, CSF significantly increased yield by 11.67–14.31%. At full heading stage, CSF significantly enhanced soil catalase, nitrate reductase, urease, and β-glucosidase activities relative to BOPT and BH. Soil inorganic N content was significantly higher under CSF at full heading and maturity. Leaf glutamate dehydrogenase, NADH-glutamate synthase, glutamine synthetase, and nitrate reductase activities were significantly increased by CSF compared with BOPT at full heading. Yield components (panicle number and grains per panicle) were positively correlated with leaf glutamine synthetase activity, soil urease, and microbial factors. N use efficiency was positively correlated with soil NH₄⁺-N. [Conclusion] CSF with controlled-release fertilizer significantly increased rice yield and N use efficiency, with a 30% N reduction achieving stable yield. The yield increase was attributed to enhanced soil enzyme activities boosting belowground N availability and increased leaf N-assimilation enzyme activities promoting aboveground N accumulation.</p>