Tobacco-rice rotation systems are widely distributed in southern China. This study aims to explore efficient straw-returning practices for high soil quality and crop productivity, particularly for high carbon sequestration while reducing greenhouse gas emissions against global climate warming. A field rotation experiment was conducted with three treatments: no straw returning (CK), conventional chopped straw returning (CS), and accelerated decomposition straw returning (ADS). A systematic evaluation was also implemented to clarify the effects of the treatments on soil multifunctionality (SMF), crop yield, greenhouse gas emissions, and the net ecosystem carbon budget (NECB). Soil and crop responses were examined during both the tobacco and rice seasons. The annual ecosystem carbon budget was calculated to compare the overall carbon sinks of the three treatments. Random forest (RF) was used to identify the soil environmental factors with annual NECB. The results showed that both CS and ADS straw-returning treatments improved SMF scores during the tobacco and rice seasons, compared with CK. Both CS and ADS shared the positive effects on the overall functioning of the soil. There was also a difference in their effects on crop yield. The ADS treatment increased both tobacco leaf and rice grain yield, whereas the CS treatment failed to increase crop yield. Compared with CK, tobacco leaf yield and rice grain yield increased by 5.14% and 11.54%, respectively, under ADS treatment. Therefore, ADS exhibited greater yield-enhancing effects than CS. Straw returning also altered greenhouse gas emissions. Compared with CK, both CS and ADS increased cumulative CO₂ emissions during the tobacco season, with increases of 66.39% and 58.37%, respectively. The increase under ADS was lower than that under CS, but cumulative CO₂ emissions under both treatments remained higher than those under CK. In addition, ADS treatment increased by 34.88% cumulative N₂O emissions during the tobacco season, which was a 27.54% increase in greenhouse gas intensity (GHGI), indicating potential environmental risks. Annual carbon-budget accounting showed that ADS treatment also increased crop net primary productivity (NPP). The additional carbon fixed after photosynthesis under ADS was substantially greater than the carbon loss with greenhouse gas emissions. Consequently, ADS produced the highest NECB among the three treatments. The NECB under ADS reached 588.07 kg/hm²(expressed as C), indicating a significant increase of 280.04%, compared with CK. The ADS treatment therefore exhibited the strongest overall ecosystem carbon sink. RF analysis indicated that soil pH, mineral-associated organic carbon (MOC), and total nitrogen (TN) were the key soil factors correlated with annual NECB (P < 0.05). In conclusion, ADS improved soil multifunctionality, tobacco leaf and rice grain yields, annual NECB, and the overall carbon-sink function of the tobacco-rice rotation system. As such, the ADS treatment can be expected to apply into tobacco-rice rotation regions of southern China, according to its crop yield and annual net ecosystem carbon balance. Greenhouse gas emissions can be further reduced to coordinate carbon sequestration, crop yield, and emission control. These findings can provide a theoretical basis to promote straw-returning practices in the tobacco- and rice-producing regions of southern China.