In this study, evaluate the effects of peach shell biochar (PSB) and microbial agent (EM) amendment on nitrogen conservation and bacterial dynamics during sheep manure (SM) composting. Six treatments were performed including T1 (control with no addition), T2 (EM), T3 (EM+2.5%PSB), T4 (EM+5%PSB), T5 (EM+7.5%PSB), and T6 (EM+10%PSB). The results showed that the additives reduced NH3 emissions by 6.12%~32.88% and N2O emissions by 10.96%~19.76%, while increasing TKN content by 8.15~9.13 g/kg. Meanwhile, Firmicutes were the dominant flora in the thermophilic stages, while Proteobacteria, Actinobacteriota, and Bacteroidota were the dominant flora in the maturation stages. The abundance of Bacteroidota and Actinobacteriota was increased by 17.49%~32.51% and 2.31%~12.60%, respectively which can accelerate the degradable organic materials decomposition. Additionally, redundancy analysis showed that Proteobacteria, Actinobacteriota, and Bacteroidota were positively correlated with NO3--N, TKN, and N2O, but a negative correlation with NH3 and NH4+-N. Finally, results confirmed that (EM+10%PSB) additives were more effective to reduce nitrogen loss and improve bacterial dynamics.