Microbial N2O production may occur via denitrification, a reaction which is influenced by the soil's water content. This study aimed to test the effect of soil water dynamics on N2O production and transport. The treatments consisted of two levels of soil bulk density (BD), negative pressure head applied on the soil cylinder (H), and saturated hydraulic conductivity of the ceramic plate placed at the bottom of the soil sample (K). We controlled the water status of repacked soil samples during two wetting-drying cycles, by using a multistep outflow system. The matric potential, outflow, N2O, and CO2 fluxes were recorded over time. A brief N2O peak occurred at the beginning of soil drying: N2O produced and entrapped in the soil during the wetting phase was released during soil drying with the increase in soil gas diffusion. Similar peaks dynamics were observed for CO2, implying that a physical process was involved. A relationship was observed to occur with maximum N2O fluxes increasing exponentially with cumulative drainage. Indeed, during drying, high N2O fluxes were measured when the air-entry potential was reached, i.e., when gas pathways were available for fast N2O transport in the gas phase. Then, maximum and cumulative N2O fluxes were highest for low BD and fast water flow during drying. Samples with the highest BD had smaller pore sizes, leading to low outflows at a given negative pressure head, and giving more time for further reduction of N2O to N2. We ranked the importance of the parameters controlling cumulative N2O fluxes: H > BD > K.