Sugar mill effluent (SME), a by-product of sugar production, is often discharged into agricultural fields; however, excessive or untreated discharge can alter the soil microbial ecology and crop productivity due to the toxic nature of high organic and mineral load. This study evaluated the effects of SME on soil methane-oxidizing bacterial (methanotrophs) community abundance (pmoA gene numbers) dynamics, assessed using 16S rRNA techniques, soil nutrient status and paddy productivity. Results showed marked variation in methanotrophic bacterial pmoA gene abundance, soil nutrient parameters, rice and paddy straw yields across SME affected paddy soils. The SME discharge significantly increased the methanotrophic pmoA gene numbers (9.84±0.006 × 107 g-1 dry soil), soil nutrient levels, and paddy yields (rice: 5.49±0.016 t ha-1 and straw: 5.85±0.017 t ha-1) in the paddy agriculture soil of Haidergarh compared to the soils of Ayodhya (rice: 5.38±0.015 t ha-1 and straw: 5.37±0.021 t ha-1) and Burhwal (rice: 4.82±0.012 t ha-1 and straw: 5.22±0.015 t ha-1) sites. The predominant methanotrophs identified in SME affected paddy soils were Methylocystis, Methylococcus, and Methylobacter members of the phylum Pseudomonadota. Further, this study demonstrates that the abundance of the methanotrophic pmoA gene and paddy yield were positively associated with improved soil physico-chemical properties following controlled SME application. These results demonstrate the SME potential to serve as an effective soil amendment when applied at appropriate amount and may serve as an integrated soil management strategy, including soil salinity control and improved soil properties to sustain higher methanotrophs community composition and paddy agricultural productivity.