The topotactic nitridation of cation ordered, tetragonal SrFeMoO in NH at moderate temperatures leads to cubic, Fm3m double perovskite oxynitride SrFeMoON where double-exchange interactions determine ferromagnetic order with T ≈ 100 K. Substitution of oxide by nitride induces bond asymmetries and local electronically driven structural distortions, which combined with Fermi level lowering restricts charge itinerancy to confined regions and preclude spontaneous long-range magnetic order. Under a magnetic field, ferromagnetic correlations expand, favoring charge delocalization and a negative magnetoresistance is observed.