Tea (Camellia sinensis L.), a perennial leaf-harvested crop, favors warm/humid climate and acidic/well-drained soils, and demands high nitrogen (N) fertilizer inputs which lead to significant emissions of NO. Potential mitigation options should be adopted to improve N use efficiency (NUE) and reduce environmental pollution in tea field system. A 3-year field experiment was carried out in a tea field in southern China from January 2014 to December 2016 to investigate the effect of controlled-release fertilizer (CRF) application on NO emissions in tea field system. Three practices, namely conventional treatment (CON, 105 kg N-oilcake ha year + 345 kg N-urea ha year), treatment with a half amount of the N fertilizer (CRF50%, 105 kg N-oilcake ha year + 120 kg N CRF ha year) and full amount of N fertilizer (CRF100%, 105 kg N-oilcake ha year + 345 kg N CRF ha year) were used. Compared with the CON, our results showed that CRF50% reduced the NO emissions by 26.2% (p > 0.05) and increased the tea yield by 31.3% (p > 0.05), while CRF100% significantly increased the NO emissions by 96.7% (p < 0.05) and decreased the tea yield by 6.77% (p > 0.05). Overall, yield-scaled NO emissions of tea were reduced by 44.5% (p > 0.05) under CRF50% and significantly increased by 100% (p < 0.05) under CRF100%, compared with CON. Based on the gross margin analysis, CRF50% obtained the highest net economic profit. Our findings suggest that reducing N input of CRF (CRF50%) is necessary and feasible for adoption in the current tea plantation system.