A large amount of ammonia volatilization in compost causes environmental pollution and reduces the quality of compost. Ammonia recycling composting strategy (ARCS) is new strategy for reducing ammonia volatilization by absorbing with backfilling ammonia into the compost. This study revealed the mechanism of ARCS on ammonia volatilization and nitrogen retention during chicken manure composting. The results showed that the adsorption layer containing wood vinegar had an obvious inhibition effect on ammonia volatilization. Compared to CK, ARCS treatment could reduce ammonia emissions and nitrogen loss by 20.65% and 39.6% with T3 (12d), respectively. Different adsorption time would affect the occurrence of various nitrogen components in the adsorption layer, especially the change of inorganic nitrogen content. Metagenomic analysis showed that ARCS treatment resulted in significant changes in bacterial communities, and different backfilling times had significant effects on nitrogen metabolism pathways in compost. Glutamate dehydrogenase and glutamate synthase were the key nitrogen metabolism processes during composting, which played an important role in ammonia volatilization and nitrogen retention. The suitable backfilling time (12d) promoted the acceleration of ammonia nitrogen metabolism in the early stage of composting and enhanced the ammonia assimilation and dissimilatory nitrate reduction function in the maturation stage to achieve nitrogen retention. This study provided valuable insights into the effects of in-situ ammonia absorption and backfilling on nitrogen metabolism pathways during composting.