This study aimed to investigate the effects of a new nitrogen-enriched organic-based fertilizer (NEO) on Italian ryegrass (Lolium multiflorum Lam.) yield and soil fauna feeding activity. Nitrogen is transformed from the air to manure by a plasma process. At the farm level, NEO could improve self-sufficiency and sustainability. The work was carried out under controlled conditions in two pot trials. Five fertilization regimes were used: no fertilizer, different amounts of mineral fertilizer, three NEO types, organic fertilizer (untreated manure), and organic fertilizer + different amounts of N in mineral fertilizer, including 14 treatments in trial one and 11 treatments in trial two. Besides evaluating dry matter yields, we utilized the Bait-lamina test system to assess the feeding activity of soil fauna. The results indicated a clear positive impact of nitrogen (N) on ryegrass yield where all fertilizers increased the yield in correspondence with their N availability regardless of the fertilizer type; whereas the yield was highest with mineral fertilizer up to our maximum level of 235 kg N ha−1 in trial one and 175 kg N ha−1 in trial two. The NEO fertilizers yielded in the same range as mineral fertilizers. The same clear pattern was not observed for soil fauna feeding activity. Instead, a tendency was observed where no fertilization tends to give the highest feeding activity. We saw no correlation between the yield and the soil fauna feeding activity. The feeding activity was highest in depth below 5 cm from the soil surface. Feeding activity also increased over time after fertilization. The NEO fertilizers had no more adverse effects on soil fauna feeding activity than other fertilizers. Other factors than fertilization alone are determining the soil fauna feeding activity.