Both water and nitrogen (N) availability have significant effects on ecosystem CO₂ exchange (ECE), which includes net ecosystem productivity (NEP), ecosystem respiration (ER) and gross ecosystem photosynthesis (GEP). How water and N availability influence ECE in arid and semiarid grasslands is still uncertain. A manipulative experiment with additions of rainfall, snow and N was conducted to test their effects on ECE in a semiarid temperate steppe of northern China for three consecutive years with contrasting natural precipitation. ECE increased with annual precipitation but approached peak values at different precipitation amount. Water addition, especially summer water addition, had significantly positive effects on ECE in years when the natural precipitation was normal or below normal, but showed trivial effect on GEP when the natural precipitation was above normal as effects on ER and NEP offset one another. Nitrogen addition exerted non-significant or negative effects on ECE when precipitation was low but switched to a positive effect when precipitation was high, indicating N effect triggered by water availability. Our results indicate that both water and N availability control ECE and the effects of future precipitation changes and increasing N deposition will depend on how they can change collaboratively in this semiarid steppe ecosystem.