Straw incorporation into soil contributes significantly to the sustainable development of agriculture. To investigate the impact of tobacco straw returns on a tobacco–rice replanting system, we designed an experiment with two straw return levels and a control group: T1 (full return), T2 (root return), and CK (no straw return). Over a three-year field experiment in rice fields in South China, we assessed the effects of tobacco straw return on soil quality, microbial diversity, dry matter accumulation, and yield composition of rice. The results demonstrated that returning tobacco straw to the field effectively enhanced rice yield by positively influencing various soil physical, chemical, and biological properties. Compared to those in the CK treatment, as the soil porosity increased from 9.0% to 12.4%, the mean weight diameter of the soil aggregates substantially increased, ranging from 28.7% to 45.2%. There were significant increases in soil organic matter, total nitrogen, and alkaline dissolved nitrogen. Soil sucrase activity increased between 29.8% and 44.9%, and urease activity increased between 4.3% and 62.2% over the three consecutive years of straw return. The diversity index of soil fungi significantly increased. Additionally, rice yield increased markedly, ranging from 1.8% to 5.1%. Overall, the enhancement effect of T1 surpassed that of T2. According to our comprehensive analysis, the incorporation of tobacco straw into the field was found to enhance the physical properties of the soil, elevate soil enzyme activity, and increase the abundance of soil microorganisms. Consequently, this practice led to improved rice yield and a reduction in agricultural waste output. Overall, the return of tobacco straw to the field represents a clean and dependable approach in rice-cultivated tobacco areas to improve soil health and rice productivity.