The impacts of soil properties and urea fertigation on nitrous oxide (N2O) emissions from uncropped areas of furrow‐irrigated Vertisol paddocks are unknown. We sampled soils from the head‐ditch end (upslope) and sediments from the tail‐drain end (downslope) of 10 Vertisols under irrigated cotton (Gossypium hirsutum L.) production in northeastern Australia. Four replicates of each sample were incubated in open‐top polyvinyl chloride (PVC) chambers at 25 ± 2°C for 25 d. Nitrous oxide emissions were measured periodically after simulated irrigations on Days 0 and 15 with either water or, for soils, urea solution. Compared with the soils, sediments were enriched in silt, total organic carbon (TOC), total nitrogen (TN), ammonium N, and dissolved organic C (DOC) but had lower pH and sand content. Sediments emitted more N2O than soils from the same paddocks after water irrigations. Nitrous oxide fluxes varied by two orders of magnitude between paddocks, with most variation explained by baseline nitrate N, TOC, pH (inversely), and sand content. Urea solution applied to soils at 30 kg N ha−1 irrigation−1 increased N2O emitted, but more so after the second irrigation. In irrigated cotton systems, tail‐drain sediments are a potential hotspot for N2O emissions that has not previously been documented.