Questions: What effect does sheep grazing have on the nutrient budgets of heathlands? Can grazing compensate for atmospheric nutrient loads in heathland ecosystems? What are the conclusions for heathland management? Location: Lüneburg Heath, NW Germany. Methods: During a one-year grazing experiment (stocking rate 1.1 sheep/ha) nutrient balances for N, Ca, K, Mg and P were calculated by quantifying input rates (atmospheric deposition, sheep excrement) and output rates (biomass removal, leaching). Results: Atmospheric nutrient deposition amounted to 22.8 kg.ha ^-1.a ^-1 for N and < 0.2 kg.ha ^-1.a ^-1 for P. Sheep excrement increased the inputs for N and P by ca. 3.5 and 0.2 kg.ha ^-1.a ^-1, respectively. Grazing reduced N- and P-stores in the above-ground biomass by 25.6 and 1.9 kg.ha ^-1.a ^-1, respectively. N-and P-losses via leaching amounted to 2.2 and < 0.2 kg.ha ^-1.a ^-1. Output:input ratios for P were high, indicating that grazing severely affected P-budgets of heaths. Conclusions: Our results suggest that sheep grazing has the potential to compensate for atmospheric nutrient loads (particularly for current N deposition rates). However, in the long term the combination of elevated N-deposition and P-loss due to grazing may cause a shift from N-(co-) limited to more P-(co-) limited plant growth. To counteract an aggravation of P-deficiency in the long term, grazing may be combined with management measures that affect P-budgets to a lesser extent (e.g. prescribed burning).