Rice production and cyanobacterial N in acid soil can be improved by liming. There is evidence that the organic amendments can increase the soil pH. The aim of this study was to find appropriate combination of soil amendments and cyanobacteria capable for enhancing nutrient uptake and improving rice yield in acidic paddy soil. Three soil amendments (rice straw, sewage‐sludge composts, NPK) with and without inoculation of cyanobacteria were studied for rice plants (Oryza sativa L.) in a pot experiment. The sludge compost had significantly reduced soil acidity from 5.44 to 6.67. The plant N and K uptake increased significantly with sludge and cyanobacteria application. The yield components increased significantly with sludge, but decreased thereafter, an exception was the number of panicles, with straw compost. These characters were also significantly affected by inoculation with cyanobacteria except 100‐grain weight, filled‐grain percentage, and harvest index. The combination of sludge compost and cyanobacteria improved the yield components and consequently grain yield (138 g pot–1) compared with sludge treatment only (132 g pot–1). The amount of cyanobacterial N absorbed (N‐difference method) by rice plant under sludge compost was higher than that of soils amended with either rice straw or NPK treatments. Therefore, the addition of sewage sludge to acid paddy soil not only amended the soil properties but also activated the cyanobacteria and consequently improved rice plant nutrition and grain yield.