The current farming system is heavily reliant on chemical fertilizers, which negatively affect soil health, the environment, and crop productivity. Improving crop production on a sustainable basis is a challenging issue in the present agricultural system. To address this issue, we assumed that the combined use of organic manure and inorganic nitrogen (N) fertilizers can improve rice grain yield and soil properties without the expense of the environment. This study explores the combined effects of cattle manure (CM), poultry manure (PM), and chemical fertilizer (CF) on soil properties, rice growth, physiology, and grain yield and quality. Six treatments in the following combinations were included: T1—no N fertilizer; T2—100% CF; T3—60% CM + 40% CF; T4—30% CM + 70% CF; T5—60% PM + 40% CF; and T6—30% PM + 70% CF. Results showed that across the seasons, treatment T6 increased the net photosynthesis rate, total biomass, grain yield, and amylose content by 23%, 90%, 95%, and 10%, respectively, compared with control. This increment in net photosynthetic rate and growth was the result of 24%, 14%, 19%, and 20% higher total root length, root surface area, root volume, and root diameter, respectively. Improvements in these attributes further enhanced the grain yield and nitrogen use efficiency of rice. No significant difference between T4 and T6 was observed. The correlation analysis also confirmed that root morphological traits were positively correlated with grain yield, N uptake, and biomass accumulation. Similarly, improvement in grain yield and NUE was also associated with improved soil properties, i.e., bulk density, soil porosity, soil organic carbon, and total N under combined organic and inorganic N fertilizers treatment. Conclusively, the integration of 30% N from PM or CM with 70% N from CF (urea) is a promising option not only for higher grain yield and quality of rice but also for improved soil health. This study provides a sustainable nutrient management strategy to improve crop yield with high nutrient use efficiency.