Crop residues are the main source of carbon (C) inputs to soils in cropping systems, and their subsequent decomposition is crucial for nutrient recycling. The interactive effects of residue chemical quality, residue placement and soil mineral nitrogen (N) availability on carbon and N mineralization dynamics were experimentally examined and interpreted using a modelling approach with the deterministic-functional, dynamic decomposition module of the Simulateur mulTIdisciplinaire pour les Cultures Standard (STICS) model. We performed a 120-day incubation at 25 °C to evaluate how the mineralization of C and N from residues would respond to residue type (residues of 10 crop species with C:N ratios varying from 13 to 105), placement (surface or incorporated) and initial soil mineral N content (9 or 77 mg N kg−1 dry soil). A reduced C mineralization rate was associated with N limitation, as observed for high-C:N ratio residues, and shaped by residue placement and initial soil mineral N content. This was not observed for low-C:N ratio residues. Overall, increased net N mineralization corresponded with reduced N availability. Using the optimization procedure in the STICS decomposition module to explain the C and N dynamics of surface-decomposing residues, we estimated that 24% of the total soil mineral N would be accessible to decomposers. The STICS decomposition module reproduced the C and N dynamics for each treatment well after five parameters were optimized. The optimized values of the biomass C:N (CNbio), residue decomposition rate (k), humification coefficient of microbial C (h), and microbial decomposition rate (λ) were significantly correlated with total N availability across all 40 treatments. Under low total N availability, CNbio increased, while k, h and λ decreased compared to their values under high N availability, suggesting functional changes in the microbial community of decomposers. Our results show that an N availability approach could be used to estimate residue C dynamics and net N mineralization in the field in response to crop residue quality and placement and demonstrate the potential to improve decomposition models by considering the effects of N availability on C dynamics.