Rice paddy conversion to vegetable production is a common agricultural practice driven by economic benefits and shifting diets. However, little is known on the initial effects of this land-use conversion on net ecosystem carbon budget (NECB) and greenhouse gas (GHG) balance. Annual NECB and emissions of CH4 and N2O were measured from a native double rice cropping system (Rice) and a vegetable field recently converted from rice paddy (Veg) under no nitrogen (N) fertilization (Rice-N0 and Veg-N0) and conventional N fertilization (Rice-N+ and Veg-N+) during the initial four years upon conversion in subtropical China. Land-use conversion from rice to vegetable cultivation led to substantial C losses (2.6 to 4.5 Mg C ha−1 yr−1), resulting from strongly reduced C input by 44–52% and increased soil organic matter mineralization by 46–59% relative to Rice. The magnitude of C losses from Veg was highest in the first year upon conversion, and showed a decreasing trend over time. N fertilization shifted rice paddy from a slight C source in Rice-N0 (−1.0 Mg C ha−1 yr−1) to a significant C sink in Rice-N+ (1.1 Mg C ha−1 yr−1) and alleviated the impact of land-use conversion on C loss via increased C input from higher crop productivity. Land-use conversion greatly increased the global warming potential (GWP) from Veg by 116–395% relative to Rice in the first year, primarily due to increased C losses and N2O emission outweighing the decreased CH4 emission. However, the GWP did not show obvious difference between Rice and Veg in the following years. N fertilization and land-use conversion interactively increased GWP in the first year via increased N2O production. Concluding, NECB and GHG emissions in the first year after conversion are crucial and should be considered when evaluating the environmental consequences of land-use conversion. © 2018 Elsevier B.V.