Nitrogen fertilizer can be added to the soil in a variety of forms including, Urea, NH₃, NH₄, NO₃, and organic molecules that contain nitrogen atoms. Once your fertilizer has been applied, it becomes a part of the nitrogen cycle. The nitrogen cycle is the cycle of processes in which nitrogen changes forms in the environment. The nitrogen cycle include three paths through which Nitrogen can be lost: volatilization, denitrification, and leaching. Nitrogen stabilizers help to manage the processes within the nitrogen cycle to maximize nutrient use efficiency.

When urea is applied as a fertilizer, it is broken down by urease enzymes that are naturally occurring in the soil. If the urea is on the soil surface when it is broken down by the enzyme, NH₃ gas is released into the atmosphere, and the Nitrogen within that NH₃ is lost. NBPT is a urease inhibitor, which blocks urease enzyme activity giving the urea time to move into the soil, where it is trapped as NH₄ and less likely to be lost to the atmosphere.

Once NH₄ is in the soil it is the target of bacteria that transform NH₄ into NO₃ in a process called Nitrification. Once the nitrogen is in the form of NO₃, it can be lost via denitrification and leaching. The denitrification process is one by which another type of bacteria converts NO₃ into a gas that is released from the soil into the atmosphere. Leaching is the process where NO₃ moves with water down through the soil and outside the root zone. DCD is a nitrification inhibitor, which blocks the activity of the nitrifying bacteria keeping fertilizer in the NH₄ form for longer. While in the NH₄ form, the N will not move through the soil, preventing leaching. Similarly, the denitrifying bacteria cannot transform NH₄ directly into a gas, reducing risk of denitrification losses.