This study illustrated how crop residue-derived carbon interacts with non-residue carbon (e.g., native soil carbon) in agroecosystems and how carbon is allocated to soil organisms and respiration under different tillage regimes. The carbon dynamics in crop residue, soil microorganisms, nematodes and respiration were monitored using 14C-labeled corn residue. In addition, the carbon budget was estimated for both conventional tillage (CT) and no-till (NT) agricultural ecosystems during the short period after residue application. A laboratory and a field study were conducted separately to assess the above objectives. The results illustrated that the general patterns of carbon allocation were similar in both laboratory and field studies but at a lower magnitude in the field. Most 14C input to soil was released into air through soil respiration (93–98%) under both CT and NT regimes, with only a small portion bound in microbial (1.8–6.5%) and nematode biomass (0.01–0.12%). However, more 14C was retained in microbial and nematode biomass under CT than under NT, while the 14C distributed in soil respiration was similar under both tillage regimes. The 14C specific activities of soil microorganisms, nematodes and respiration were significantly higher under CT than under NT. The higher 14C specific activities of soil microorganisms and nematodes, and more 14C retained in the biomass of soil microorganisms and nematodes under CT, suggested that soil organisms might use C more efficiently under CT than under NT. During the short-term experiments, cumulative soil respiration was significantly higher but residue-derived carbon contributed less to soil respiration under NT than under CT. Consequently, more non-residue carbon (e.g., native soil carbon) was decomposed and respired by soil organisms under NT than under CT after 40 days of the residue application. It is suggested that residue application might cause a net loss of soil carbon in agroecosystems possibly because of the priming effect of crop residue, particularly under NT regime under the short term.