A method to quantify the biochemical conversion of the strong greenhouse gas N2O into the environmentally benign N2 was developed. It is based on N2O gas diffusing through a soil core under specified laboratory conditions. Soil moisture level in the soil significantly influenced the N2O reduction potential of the soil. Nitrous oxide is produced in soil by nitrifying and denitrifying microorganisms. Most of the N2O produced in soil is reduced to N2 in the final step of denitrification, and only a fraction is released into the atmosphere. No reliable methods exist, however, to quantify N2O reduction and its controlling parameters in soil. In this study, we investigated: (i) a novel method to quantify the reduction of N2O in soil as it diffuses upward; and (ii) the effects of soil moisture content on N2O reduction. We developed a setup where a silicone tube coil permeable to N2O linked to an N2O reservoir simulated a subsoil with a known, artificial N2O source. A soil core filled with repacked sandy soil (a Typic Endoaquoll) was placed on top of the silicone coil. Experimental treatments included water-filled pore space (WFPS) levels of 60, 75, and 90%, as well as a quartz sand treatment at 90% WFPS that served as an abiotic control. Soil surface N2O emissions were measured for 21 d, and after the experiment, residual N2O in the system was determined. During the experiment, 41, 39, and 0% of the applied N2O was emitted as soil surface flux for the 60, 75, and 90% WFPS treatments, respectively. In the 90% WFPS treatment, 52% of applied N2O was reduced to N2. We conclude that our method enables us to quantify N2O reduction in soil columns. Our results further show that wet soils can be effective in reducing N2O to N2 during upward diffusion from the subsoil.