A method of reducing nitrous oxide which comprises introducing nitrous oxide into a reaction chamber disposed in contact with an electrolytic chamber having an anode and a cathode comprising a hydrogen-absorbing material, the cathode serving as a diaphragm separating the reaction chamber and the electrolytic chamber, and contacting the nitrous oxide with the diaphragm to thereby continuously reduce the nitrous oxide with hydrogen atoms electrolytically generated on the cathode, absorbed by the hydrogen-absorbing material and passing through the diaphragm. The cathode preferably has catalyst comprising a platinum group metal black deposited on the side of the cathode opposite the anode. Also disclosed is an electrolytic cell for the reduction of nitrous oxide partitioned with a diaphragm into an electrolytic chamber having an anode and a reduction reaction chamber, the diaphragm comprising a hydrogen-absorbing material, and the side of the diaphragm facing the electrolytic chamber serving as a cathode.