Abstract: Clarifying the effects of organic fertilizer substitution and biochar or biochar-based fertilizer application on the paddy soil quality and rice grain yields can provide a theoretical basis for the sustainable utilization of paddy fields in the middle and lower reaches of the Yangtze River in China. Pot experiments were conducted to explore the effects of biochar or biochar-based fertilizer application in combination with organic fertilizer substitution on soil quality, rice growth, and nitrogen use efficiency. This study included the following eight treatments: control (CK), conventional fertilization (CF), biochar addition (BC), organic fertilizer substitution (OF), biochar-based fertilizer addition (BF), conventional fertilization with biochar (CF+BC), organic fertilizer substitution with biochar (OF+BC), and organic fertilizer substitution with biochar-based fertilizer (OF+BF). The results revealed that compared with that under CK, the pH under BC, BF, OF+BC, and OF+BF significantly increased by 0.22, 0.13, 0.26, and 0.18, respectively. The soil organic carbon content significantly increased by 8.8%−17.8% in the treatments with organic fertilizer, biochar or biochar-based fertilizer application and the total nitrogen content significantly increased by 9.3%−12.7% in the treatments with organic fertilizer or chemical fertilizer application compared with that under CK, with OF+BC showing the largest increases. Compared with CK, other treatments showed significant increases of 14.3%−35.9%, 5.5%−19.9%, and 14.2%−54.0% in the content of available phosphorus, available potassium, and microbial biomass carbon (MBC), respectively, and OF, CF+BC, OF+BC, and OF+BF significantly increased the available nitrogen content by 24.3%−41.5%, with OF+BC showing the largest increases. The trends of soil urease, sucrase, alkaline phosphatase, acidic phosphatase, and catalase activities among treatments were similar to that of MBC, and there was no significant difference between OF+BC and OF+BF. Compared with CK, other treatments significantly increased the soil quality index, rice grain yield, and the plant accumulation of nitrogen, phosphorus, and potassium by 78.3%−209.1%, 27.3%−93.0%, 30.2%−117.3%, 32.6%−101.9%, and 37.1%−104.0%, respectively, with OF+BC showing the largest increase. Meanwhile, the nitrogen recovery rate significantly increased by 27.4%, 55.3%, 83.1%, and 72.0% under BF, CF+BC, OF+BC, and OF+BF, respectively, compared with that under CF. Therefore, the application of biochar or biochar-based fertilizer in combination with organic fertilizer substitution can promote the simultaneous improvement of soil quality and rice grain yields, which is beneficial to the sustainable utilization of paddy fields in the middle and lower reaches of the Yangtze River in China.