Nitrification and urease inhibitors have been used to reduce nitrous oxide (N2 O) emissions and increase nitrogen use efficiency in many agricultural systems. However, their agronomic benefits, such as the improvement of grain yield, is uncertain. A two-year field experiment was conducted to (1) investigate whether the use of 3,4-dimethylpyrazole phosphate (DMPP) or N-(n-butyl) thiophosphoric triamide (NBPT) can reduce N2 O emissions and increase grain yield and (2) explore the financial benefit of using DMPP or NBPT in a rain-fed cropping system in south-eastern Australia. The experiment was conducted at Wagga Wagga, New South Wales, Australia with wheat (Triticum aestivum L.) iN2012 and canola (Brassica napus L.) iN2013. Results showed that urea coated with DMPP reduced the cumulative N2 O emission by 34% for a wheat crop iN2012 (P < 0.05) and by 62% for a canola crop iN2013 (P < 0.05) compared with normal urea, but urea coated NBPT had no effect on N2 O emission for the wheat crop iN2012. Neither nitrification nor urease inhibitors increased crop yields because the low rainfall experienced led to little potential for gross N loss through denitrification, leaching or volatilisation pathways. In such dry years, only government or other financial incentives for N2 O mitigation would make the use of DMPP with applied N economically viable.