The tomato is an important economic crop that is a main ingredient of some prepared food as well as a focus of the agricultural industry. Optimizing nitrogen (N) fertilizers is essential for sustainable agricultural development, while the excessive use of N fertilizers leads to environmental and food production problems. As a soil amendment, biochar has been widely used to improve soil quality and crop yield. However, little information is available on the effects of biochar and N fertilizer reduction on tomato plant, soil characteristics in tomato cultivation and tomato production. In this study, a greenhouse experiment was carried out in Yangling, Shaanxi province, China, including four biochar levels (0, 30, 50, and 70 t ha−1) under drip irrigation and four N application rates (170, 190, 210, and 250 kg ha−1). The results showed that adding too much biochar (e.g., 70 t ha−1) and reducing N fertilizer too far (e.g., by 32%) will not lead to satisfactory results in terms of tomato growth, tomato yield and quality, and economic benefits. Biochar addition could significantly enhance microbial abundance, enzyme activity, and tomato growth compared with non‒biochar treatments when reducing the amount of applied N fertilizer by 16% or 24% (N2 and N3). From the perspectives of tomato yield, tomato quality (sugar‒acid ratio and vitamin C (VC) content), and economic benefits, optimal application rate of biochar and N fertilizer based on the silty clay loam soil of northwest China under drip irrigation is proposed, respectively. The proposal is based on both multidimensional nonlinear regression models and a comparison with experimental treatments. For example, biochar addition at 50 t ha−1 and reducing N fertilizer by 24% achieved the greatest tomato yield. Compared with non-biochar treatment under the corresponding N fertilizer level, soil enzyme activity (urease, phosphatase, and catalase), microbial abundance (bacteria, fungi, and actinomycetes), leaf gas exchange parameters (gs, Pn, and Tr), and biomass increased on average by 88.76%, 7.49%, 43.23%, and 39.67%, respectively. Based on a comprehensive consideration of tomato yield, VC content, sugar‒acid ratio, and economic benefits, 35 t ha−1 biochar and 200 kg ha−1 N fertilizer is the recommended combination of biochar and nitrogen fertilizer for local farmers.