Nitrogen losses from urine patches in a grazed pasture system in New Zealand have been identified as the major contributor to environmental degradation. A field experiment was therefore set up on a permanent pastoral site at Massey University dairy farm, Palmerston North to develop mitigating options using N inhibitors. Cow urine at 600 kg N ha-1 rate with or without urease inhibitor (agrotain), nitrification inhibitor (dicyandiamide or DCD) and agrotain plus DCD were applied to appropriate small plots (1x 2 m) in May 2005. Following urine application, soil samples were collected from each plot at different timings to determine soil ammonium and nitrate concentrations in (0ƒ{10 and 10ƒ{20cm) to follow up N dynamics in soil profile and changes in soil pH, soluble organic C and microbial biomass C and N in (0ƒ{10cm). Nitrogen losses via ammonia volatilization, nitrous oxide emission and nitrate leaching were also monitored. To simulate grazing practice, pastures were cut at different timings to determine pasture dry matter and N uptake. The preliminary results showed that urine applied with different N inhibitors had a significant effect on all the above measured parameters suggesting that N inhibitors have the potential to reduce N losses and improve pasture production, therefore they may offer hope for mitigating of N losses in an intensively grazed system.