Enhanced deposition of atmospheric nitrogen (N) leads to loss of plant diversity in grassland ecosystems. Numerous theories have provided potential explanations for the negative effects of N enrichment on plant diversity. However, the relative importance of each mechanism and the time-scales of responses for the different functional groups remain unclear. We investigated the temporal responses of plant community in a temperate steppe to N enrichment by linking above-ground to below-ground processes using a series of field N-addition and greenhouse experiments. The N enrichment-induced declines in plant diversity of grasslands were phase-based, functional group-dependent and driven by three below-ground processes. The rapid accumulation of (Formula presented.) by N addition inhibited photosynthetic rates of broad-leaf non-rhizomatous forbs, contributing to loss of these N-sensitive species during early phase of N enrichment (≤3 years). The N-induced changes in this phase were independent of soil pH as evidenced by results from application of lime to mitigate N-evoked soil acidification. With progression of N addition, manganese (Mn) toxicity to narrow-leaf non-rhizomatous forbs due to soil acidification-induced Mn2+ mobilization in soil accounted for their loss in the second phase of N enrichment (~4–9 years). When N addition proceeded longer than ~10 years, N enrichment stimulated below-ground meristem differentiation and rhizome growth of the rhizomatous species, leading to the dominance by rhizomatous sedges/grasses in the community at the later phase of N enrichment. Synthesis. The hierarchical mechanisms not only provide a comprehensive explanation for the N enrichment-induced diversity decline in grasslands, but can also facilitate us to understand the differential sensitivities of ecosystems to chronic N enrichment, and predict future ecosystem dynamics.