Nitrogen (N) fertilizer is essential for increasing yields in intensive agricultural systems, but it also creates an environmental burden. Improving recovery efficiency of N (RE_N) is the key to balancing the trade-off between crop production and environmental protection. However, the current status of the RE_N in China and whether a high RE_N is sufficient for sustainable wheat production remain unclear. Here we estimated the RE_N of wheat production in China using N-difference method and ¹⁵N-labelled method, explored strategies to improve RE_N, and clarified that China’s nitrogen management of wheat production needs more than high nitrogen use efficiency. The findings of a 12-year field trial showed that the RE_N estimated by N-difference method was double that estimated by ¹⁵N-labelled method, and meta-analysis results showed that the national mean RE_N estimated by the two methods were similar, ranging from 30% to 33%. Notably, the RE_N was consistently lower than the global mean according to both methods; thus, exploring strategies to improve RE_N is vital. Results showed that reducing N fertilizer application rate and N surplus are essential for improving RE_N; however, indiscriminately reducing N application rate creates a great risk of reducing yields since insufficient and excessive use of N fertilizer is prevalent in wheat production of many counties. The establishment of the inherent interconnections among RE_N, crop yield, and N surplus showed that RE_N or N surplus should be used together with yield as an indicator of the sustainability of crop systems. The implementation of comprehensive N management techniques increased RE_N (38–104%) and yield (8–9%) while reducing N surplus (52–89%), which provides a good starting point for further discussions of N fertilizer management for sustainable wheat production.