While straw return is widely adopted for crop residues dispose and soil carbon sequestration, it significantly raises greenhouse gas (GHG) emissions (especially CH4) in paddy fields. This study proposed piled straw return (PSR, straw piled for pre-decomposition before incorporation) as a novel approach and conducted a comparative analysis with direct straw return (SR). Results demonstrated that the pre-decomposition process effectively decreased pathogens (by 74–94 %) and total solid mass (by 31–33 %) in straw. During the subsequent rice growing season, PSR significantly reduced CH4 emissions (by 32–53 %) while maintaining rice yields. Microbial community in paddy soil indicated that PSR decreased CH4 emissions through limiting methanogenic substrates and suppressed the abundance of methanogens (notably Methanocella). Life cycle assessment showed the global warming potential (GWP) of the PSR treatment was 20.40 t CO2-eq ha−1, representing a 41.86 % reduction compared to conventional straw return (SR, 35.09 t CO2-eq ha−1). Furthermore, life cycle costing confirmed the enhanced economic viability of PSR, demonstrating its strong cost-effectiveness under carbon pricing. In summary, this study demonstrated PSR is a simple and low-cost strategy of straw return that effectively mitigates greenhouse gas emissions and enhances profitability, thereby offering a practical approach for sustainable agriculture.