Conventional controlled-release fertilizers (CRFs) contribute to microplastic pollution due to their non-degradable polymer coatings. The development of eco-friendly and biodegradable alternatives is essential for sustainable agriculture. This study aimed to fabricate and evaluate a biodegradable CRF system using calcium alginate (CaAlg) beads containing functional additives. CaAlg beads encapsulating urea were fabricated by the extrusion-dropping method. Polyvinyl alcohol (PVA) and citric acid (CA) were added to improve structural integrity, and humic acid (HA) was included as a functional filler. The physical properties, urea loading efficiency, and release profile of the beads were evaluated in this study. The actual performance of the CRF was evaluated through a 90-day carrot cultivation experiment by monitoring plant growth and soil nitrogen levels. The results showed a trade-off in that higher crosslinking density decreased the urea loading (from 84.9% to 62.2%), but the urea release rate was considerably slower. The addition of PVA and CA further inhibited the release rate. Importantly, the controlled release ability of CRF was demonstrated in carrot growth tests. The sustained release maintained high soil nitrogen content, thereby suppressing the growth of carrots sensitive to excess nitrogen. The final soil analysis results also supported these results, which paradoxically confirmed the excellent controlled release ability of CRF compared to conventional elements that are rapidly released. The fabricated CaAlg-based CRF shows great potential as an effective and environmentally friendly platform for regulating nitrogen supply in agricultural fields.