Although straw is an abundant and useful agricultural byproduct, it, however, exhibits hardly any decomposition and transformation. Despite the successful application of chemical and biological substrates for accelerating straw decomposition, the co-effects and mechanisms involved are still unknown. Herein, we performed a 120 day field trial to examine the co-effects of a nitrogen fertilizer (N) and a straw-decomposing microbial inoculant (SDMI) on the straw mass, nutrient release, and the straw chemical structure of composted wheat straw in the Chaohu Lake area, East China. For this purpose, four treatments were selected with straw: S (straw only), NS (N + straw), MS (SDMI + straw), and NMS (N + SDMI + straw). Our results indicated that NMS caused a higher straw decomposition rate than S, NS, and MS (p < 0.05) after 120 days of composting. The N, P, and K discharge rates in treating with NMS were higher than other the treatments at 120 days. The A/OA ratios of the straw residues were gradually increased during the composting, but the treatment of NMS and MS was lower than the CK at the latter stage. The RDA showed that the decomposition rate, nutrient release, and the chemical structure change in the straw were cumulative, while respiration was strongly correlated with lignin peroxidase, manganese peroxidase, and neutral xylanase. In conclusion, nitrogen fertilizer or straw-decomposing microbial inoculant application can improve the decomposition rate and nutrient release with oxidase activity intensified. However, the co-application of nitrogen fertilizer and a straw-decomposing microbial inoculant promoted straw decomposition and enzyme activity better than a single application and showed a lower decomposition degree, which means more potential for further decomposing after 120 days.