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Abstract Farmers are not growing diversified crops and applying huge amounts of agrochemicals and imbalanced fertilizers in the rice-wheat cropping system (RWCS), since the 1960s. The objective of this study was to evaluate the microbial and nutrient dynamics in Indian mustard (Brassica juncea L.) under various sowing environments and nutrient sources during Rabi season (October–March), 2015–2016. The experiment was laid out in the split-plot design with three sowing dates in main-plots, and eight nutrient sources in sub-plots. The maximum bacteria, fungi, and actinomycetes population, soil microbial biomass carbon (SMBC), dehydrogenase activities, and available nitrogen, phosphorus, potassium, and sulphur (NPKS) were recorded on November 17 sown crop, and the lowest was observed on December 7 sowing during both the years, and in the pooled analysis. Furthermore, applied nutrient sources, highest bacteria, fungi, and actinomycetes population, available NPKS, SMBC, and dehydrogenase activity were observed in 75% recommended dose of fertilizers (RDF) + 25% N through pressmud (PM) + Azotobacto + phosphorus solubilizing bacteria (PSB) than other nutrient sources. In conclusion, high demand and cost of chemical fertilizers can be replaced by 25% amount easily and locally available organic manures like PM compost to sustain the soil health and crop productivity. It will be helpful to restore the soil biodiversity in the RWCS and provide a roadmap for the researchers, government planners, and policymakers for the use of PM as a source of organic matter and nutrients.