Nitrous oxide (N2O) was previously deemed as a potent greenhouse gas but is actually an untapped energy source, which can accumulate during the microbial denitrification of nitric oxide (NO). Compared with the organic electron donor required in heterotrophic denitrification, elemental sulfur (S0) is a promising electron donor alternative due to its cheap cost and low biomass yield in sulfur‐driven autotrophic denitrification. However, no effort has been made to test N2O recovery from sulfur‐driven denitrification of NO so far. Therefore, in this study, batch and continuous experiments were carried out to investigate the NO removal performance and N2O recovery potential via sulfur‐driven NO‐based denitrification under various Fe(II)EDTA‐NO concentrations. Efficient energy recovery was achieved, as up to 35.5%–40.9% of NO was converted to N2O under various NO concentrations. N2O recovery from Fe(II)EDTA‐NO could be enhanced by the low bioavailability of sulfur and the acid environment caused by sulfur oxidation. The NO reductase (NOR) and N2O reductase (N2OR) were inhibited distinctively at relatively low NO levels, leading to efficient N2O accumulation, but were suppressed irreversibly at NO level beyond 15 mM in continuous experiments. Such results indicated that the regulation of NO at a relatively low level would benefit the system stability and NO removal capacity during long‐term system operation. The continuous operation of the sulfur‐driven Fe(II)EDTA‐NO‐based denitrification reduced the overall microbial diversity but enriched several key microbial community. Thauera, Thermomonas, and Arenimonas that are able to carry out sulfur‐driven autotrophic denitrification became the dominant organisms with their relative abundance increased from 25.8% to 68.3%, collectively.