Plastic film mulching is widely used in water and temperature-limited regions to enhance crop yields. Phosphorus (P) fertilization can address deficiencies in soil P availability. In this four-year field experiment conducted in an alpine agricultural area, we explored the effects of nitrogen (N) and P supply imbalance on faba bean cultivation, particularly examining intensified N competition between soil microbes and plants. The randomized block design comprised three film mulching treatments—no film mulching with flat planting (NMF), double ridges and furrows mulched with one plastic film (DRM), and three ridges and furrows mulched with one plastic film (TRM)—and three P levels—P0 (0 kg P ha−1), P1 (9.10 kg P ha−1), and P2 (18.2 kg P ha−1). The results indicated that NMF enhanced soil available N and microbial biomass N (MBN) during early growth stages, consequently improving faba bean yield, nodule weight, total N, and microbial biomass carbon (MBC) compared to DRM and TRM. DRM and TRM exhibited higher soil available N and MBN during later growth stages and higher soil temperature and water content, soil water storage (SWS), soil organic C (SOC), and soil C/N ratio than NMF. In NMF and DRM, P fertilization increased grain yield, nodule weight, SOC, total N, soil C/N ratio, soil available N, and MBC but decreased MBN during early growth stages, and decreased soil water content and SWS. TRM exhibited the opposite trend. P fertilization increased soil total P and available P. Overall, NMF combined with P fertilization (~18.2 kg P ha−1) significantly improved faba bean yield. However, it may also accelerate SOC decomposition, highlighting the need to consider N fertilizer application in this alpine agricultural region.