Nitrogen pollution in watersheds is a serious problem all over the world. Large hydropower projects have greatly altered the nitrogen cycle in watersheds. The water in Three Gorges Reservoir, as our national precious freshwater resources, is facing safety issues caused by frequent outbreaks of algal blooms in tributaries. How to reduce nitrogen pollution effectively and maintain the stability of the water-level-fluctuation zone (WLFZ) is a practical issue to be solved urgently, especially to achieve the ecological operation of the Three Gorges Reservoir. As the "biogeochemical cycle hotspot" of the adjacent basin, the reservoir WLFZ plays an important role in the process of nutrient cycling, non-point source pollution interception, and greenhouse gas emissions. With the wide application of new research techniques, such as bioinformatics and molecular biology in environmental research, the process and mechanism of nitrogen cycle have been interpreted more microcosmically, and the research on the diversity and niche divergence of nitrogen cycle functional microorganisms has also made great achievements. Our study is based on the latest research progress of nitrogen cycle process, related soil-plant-microorganism interactions in the land-water ecotones. In addition, this review has summarized the process and mechanism of nitrogen cycle in the reservoir WLFZ, analyzed the potential impact of the reservoir WLFZ on the water environment and greenhouse gas emissions. In order to provide scientific supports for the integrated management on WLFZ ecosystem of large reservoirs, we made a further outlook on the problems to be solved in the future.