Nitrogen deposition and climate change are among the most important drivers for biodi-versity loss and shifts in ecosystem functions. In the present study we analysed (at the exam-ple of heathland ecosystems) the impact of N deposition on ecosystems functions and speciescomposition by means of three experiments: (i) Impact of N deposition on N allocation pat-terns and N retention in heaths based on a two-year 15N tracer field experiment, (ii) the impactof N deposition on the competition between Calluna vulgarisand Molinia caerulea(green-house experiment), and (iii) interaction effects of N deposition and drought events on thegrowth performance of Calluna vulgaris(greenhouse experiment). 15N tracer recovery was90% and 76% in the first and second year, respectively. More than 99% of the tracer recov-ered was sequestered in the biomass and soil, while leaching losses were < 0.05% after 2years. Mosses were the most important short-term sink for 15N (64% recovery in the firstyear), followed by the organic layer. In the second year, the moss layer developed from a sinkto a source (23% losses), and soil compartments were the most important sink (gains of 11.2%in 2008). Our results suggest that the investigated heaths still have conservative N cycling,even after several decades of high N loads. This finding was attributable to the high immo-bilisation capacities for N in the podzol-A- and B-horizons. Podzols thus have a high poten-tial to withdraw airborne N from the system’s N cycle. In the first greenhouse experiment(competition experiment), Molinia caeruleasequestered about 65% of the N applied, whileCalluna vulgarissuffered from N shortage (halving of the total biomass in mixtures). Thus,in mixtures only Moliniawill benefit from airborne N loads, and competition will becomeincreasingly asymmetric with increasing N availability. Since seedlings of both species wereanalysed, our findings demonstrate that the heath’s pioneer phase might be the crucial tippingpoint at which the competitive vigour of Molinia will induce a shift to dominance of grassesunder increased N availability. In the second greenhouse experiment, N fertilisation anddrought showed significant interaction effects. N-fertilised Calluna-plants were more susep-tible to drought events (in terms of the formation of necrotic tissue) compared to non-fertilisedplants. We hypothesise that increasing drought susceptibility of fertilised plants was attribut-able to incresing shoot-root ratios and decreasing mycorrhizal colonisation, resulting in high-er evaporative demands and lowered water supply, respectively.