Crop residue management has been shown to significantly affect the decomposition process of plant debris in soil. In previous studies examining this influence, the extrapolation of laboratory data of carbon and/or nitrogen mineralization to field conditions was often limited by a number of interactions that could not be taken into account by a mere experimental approach. Therefore, we demonstrated the interactive effect between crop residue location in soil (mulch vs. incorporation) and its biochemical and physical quality, in repacked soil columns under artificial rain. Decomposition of 13C and 15N labelled rape and rye residues, with associated C and N fluxes, was analysed using the mechanistic model PASTIS, which turned out to be necessary to understand the interacting factors on the C and N fluxes. The influence of soil and residue water content on decomposition and nitrification was evaluated by the moisture limitation factor of PASTIS. This factor strongly depended on residue location and to a smaller extent on physical residue properties, resulting in a lower decomposition rate of about 35% for surface placed compared to incorporated residues. Irrespective of its placement, the biochemical residue quality (e.g. N availability for decomposition, amount of soluble compounds and lignin) was responsible for a faster and more advanced decomposition of about 15% in favour of rye compared to rape, suggesting only a limited interaction between residue quality and its location. Net N mineralization after nine weeks was larger for rye than for rape, equivalent to 59 and 10 kg NO3-–N ha-1 with incorporation, and 71 and 34 kg NO3-–N ha-1 with mulch, respectively. This net N mineralization in soil resulted from the interaction between soil water content, depending on residue placement, and N availability, which was determined by the biochemical residue quality. Moisture limitation appeared more important than N limitation in the decomposition of mulched residues. Modelling of gross N mineralization and immobilization also revealed that leaving crop residues at the soil surface may increase the risk of nitrate leaching compared to residue incorporation, if (i) soil water content under mulch is larger than with residue incorporation (more gross N mineralization), and (ii) availability to the applied C-source is limited (less gross N immobilization). Scenario analyses with PASTIS confirmed the importance of moisture conditions on the decomposition of mulched residues and the small interaction between biochemical crop residue quality and its location in soil.