Periphyton exists commonly in paddy field but its characteristics and role in nutrient cycling are poorly understood. In this work, microcosm experiments were carried out for 6 weeks to study the development and succession of periphyton in paddy soil and to evaluate the roles of periphyton in N and P cycling in the rice paddy system. The development and role of periphyton was investigated using microcosms prepared from paddy soil from the field with and without fertilization. Nutrient levels in water, periphyton layer, and soil layers were monitored overtime. Total nitrogen (TN), ammonia, nitrate, total phosphorous (TP), soluble reactive phosphorus (SRP), and pH were analyzed in water. Periphyton samples were analyzed for chlorophyll a, total Kjeldahl nitrogen (TKN), TP, and P fractionation, and DNA was extracted for Hiseq sequencing. Upper and lower soil samples were only analyzed for TKN and TP. Development of periphyton was observed on the soil/water interface with or without the addition of fertilizer and caused an increase in water pH. In both treatments, nutrient levels declined rapidly overtime in the first few weeks but gradually slowed down toward the end of the experiment. Hiseq sequencing showed a considerable variation of microbial community in periphyton over time in both treatments. For algae, fertilization resulted in an increase in the relative abundance of Chlorophyta, but as nutrient became deficient Diatomea became dominant. For prokaryotes, Chloroflexi was dominated in the initial and former growth phases, while Cyanobacteria dominated the latter growth and mature phases regardless of nutrient levels. Periphyton can develop on the interface of soil and water in paddy system regardless of the nutrient status. Its microbial compositions can vary overtime and are related to the nutrient levels. Presence of periphyton accelerates the nutrient removal from overlaying water although the removal was rapid even without periphyton.