Since hydrothermal aqueous phase (HAP) contains abundant nutrients and humic-like substances, it is developed as nitrogen (N) fertilizer to improve plant growth and soil quality. However, significant NH3 volatilization is a major drawback in dryland soil. To solve this problem, a compound fertilizer of HAP and urea was modified with various dosage (0.25 % - 5.0 %) of urease inhibitor N-(n-butyl) thiophosphoric triamide (NBPT). The NH3, N loss, and lettuce growth were evaluated in parallel soil column and pot experiments. Results showed that increasing NBPT dosage increased soil dissolved organic N (DON) and ON while decreased NH4-N, NH3, N loss, urease activity, and ureC. NBPT successfully inhibited ammonification. Increasing NBPT dosage increased NO3-N but decreased PAO and AOA. The utilization rate of metabolic substrate (NH4-N) was more important for forming NO3-N, as evidenced by the negative correlation of NO3-N and NH3. The DON from HAP included N-heterocyclic compounds, which are toxic for nitrifiers. The toxic DON also significantly decreased root dry weight by 22.31 % when 5.0 % NBPT was added. The optimal additive dosages were 0.5 % and 2.0 % in the column and pot experiments, respectively, which decreased NH3 and N loss by 45.38 % and 32.08 %. Further increasing NBPT dosage no longer decreased N loss but did harm to plant root. Therefore, this study demonstrated that an appropriate addition of NBPT to HAP fertilizer can effectively reduce ammonia volatilization and N loss. The innovative technique would promote the utilization of HAP resource within the context of sustainable dryland agriculture.