There is a global need to improve the environmental performances and circularity of livestock production systems. This relates also to poultry production systems in China, however, the benefits of optimized, more circular systems have not been quantified. Here, we applied a substance flow analysis to estimate the reactive nitrogen (Nr) losses and greenhouse gas (GHG) emissions from housing, manure processing and manure application to cropland in a conventional decoupled and an optimized coupled crop-poultry system. We hypothesized that an optimized coupled system has lower Nr losses and GHGs emissions, and a higher economic return for farmers. We used data from experimental measurements, a farm survey, literature and local market prices to estimate the farm performance for both systems. In the conventional system the manure was only partly (58%) utilized and the remaining 42% was wasted and discharged into the environment. In the optimized system a series of emission mitigation measures was adopted, including low-protein feeding, manure composting with additives and a partial replacement of synthetic fertilizers by manure. The optimized system produced 24% more products per 100 units of N input, leading to a whole-system nitrogen use efficiency (NUE) increase from 33% to 50%. The Nr losses per unit of product-N decreased by 55%, whereas the GHG emissions (N2O and CH4) decreased by 35%. Moreover, the net economic benefit increased by 21%. Evidently, the optimized and more circular system had significant economic and environmental benefits compared to the conventional one. These benefits will be drivers for the transformation to more sustainable production systems, but governmental policy incentives will be needed to remove current cultural and institutional barriers.