A laboratory incubation experiment in a closed dynamic air flow system was conducted for 30 days to estimate the volatilization loss of NH₃-N from 0, 1, 2 and 3% Nano-ZnO coated urea treated soil. The volatilized NH₃-N from the soil chambers was collected and titrated every 48 hours. Another incubation experiment was carried out to study the effect of coating urea with Nano-ZnO on the inorganic nitrogen (NH₄-N and NO₃-N) content in the treated soils at 2, 4, 8, 14 and 21 days of incubation period. The two experiments were arranged in a completely randomized design with three replications. The results of the first experiment indicated that coating urea fertilizer with Nano-ZnO  reduced the total loss of NH₃-N from 22.82 % of applied N in the soil treated with uncoated urea (0 % coating) to 13.03% for the highest coating level (3%) with a reduction in NH₃-N loss by 42.90%.The results of second incubation experiment showed that the average of NH₄-N content increased from 86.52 mg Kg^-1 for 0% Nano-Zn coated urea to 131.04 mg Kg^-1 in the soil treated with 3% Nano-Zn coated urea, and the ratio of extractable NO₃-N average to the extractable NH₄-N average was 1: 1.06, 1: 1.17, 1: 1.50 and 1: 1.75 in the soil treated with 0, 1, 2 and 3% Nano-Zn coated urea, respectively. Also, the average of total inorganic N content increased from 168.19 mg Kg^-1 in the soil treated with uncoated urea (0% coating) to 205.70 mg Kg^-1 in soil treated with  highest coating level (3%).Therefore, using the Nano-Zn coated urea fertilizer improves nitrogen use efficiency and  reduce ammonia loss from urea fertilizer applied to loamy sand soil.