Nano-fertilizers are becoming promising in developing novel fertilization strategies while reducing the requirements of traditional fertilizers. Nano-fertilizers have high nutrient use efficiency (NUE) and are required in small doses as compared to bulk fertilizers. The use of nano fertilizers in conjunction with a reduced dose of traditional fertilizers improves nutrient availability to plants and minimizes leaching and environmental contamination. The impact of the application of such an integrated fertilization approach on the soil fertility and microbiological population also needs to be understood. The present study investigates the influence of seven field treatments, including biogenic urea nanoparticles, as a source of N nutrient developed by TERI (referred as Teri's nano urea [TNU]), with and without conventional urea in an integrated manner. These treatments include the following: (T1)—100% recommended dose of nitrogen (RDN), (T2)—TNU alone, (T3) 100% RDN combined with TNU, (T4)—TNU at 50% concentration alone, (T5)—75% RDN combined with TNU, (T6) 50% RDN combined with TNU, and (T7) 50% RDN alone. RDF for N, P, and K used in the experiment is 140 kg/ha of urea for nitrogen fertilizer, 60 kg/ha of phosphorus, and 70 kg/ha of potassium in accordance with the local agronomic guidelines. A variable amount of urea was applied in different treatments but the recommended dose of phosphorous and potash fertilizers was applied consistently across the treatments. In different treatments, urea nanoparticles were applied as a nitrogen source via root dipping and foliar spray. The study also incorporates the economics of using nanoparticles to supplement nitrogen in an additive manner along with non-nano macronutrient sources. Further, the influence of this novel approach of fertilization was also evaluated on the native microorganism species found in the rice fields. The results for the evaluated growth parameters, yield parameters, microbial population of soil, plant uptake, and cost economics suggest that at least 25% of the conventional urea requirement can be substituted with urea nanoparticles without causing harm to the bacterial and mycological species found in the rice agricultural fields.