Global warming effects have drawn more and more attention to studying all sources and sinks of nitrous oxide (N2O). Sludge bio-drying, as an effective sludge treatment technology, is being adopted worldwide. In this study, two aeration strategies (piles I and II) were compared to investigate the primary contributors to N2O emission during sludge bio-drying through studying the evolution of functional genes involved in nitrification (amoA, hao, and nxrA) and denitrification (narG, nirS, nirK, norB, and nosZ) by quantitative PCR (qPCR). Results showed that the profile of N2O emission can be divided into three stages, traditional denitrification contributed largely to N2O emission at stage I (days 1-5), but N2O emission mainly happened at stage II (days 5-14) due to nitrifier denitrification and NH2OH accumulation by ammonia-oxidizing bacteria (AOB), accounting for 51.4% and 58.2% of total N2O emission for piles I and II, respectively. At stage III (days 14-21), nitrifier denitrification was inhibited because sludge bio-drying proceeded mainly by the physical aeration, thus N2O emission decreased and changed little. The improved aeration strategy availed pile I to reduce N2O emission much especially at stages II and III, respectively. These results indicated that nitrifier denitrification by AOB and biological NH2OH oxidation due to AOB made more contribution to N2O emission, and aeration strategy was crucial to mitigate N2O emission during sludge bio-drying.