Nitrous oxide (N₂O) is one of the most important greenhouse gases emitted by the semi-arid grasslands of Northern China. The majority of previous studies focused on nitrogen (N) deposition and its impacts on N₂O emission rates in this region, while the mechanisms and controls of N₂O emission and the evidence for a “balance point” following increasing N deposition remained unclear. In this study, we investigated during 2013–2015 the environmental and plant controls over N₂O emission rates within a long-term N addition experiment with nitrogen levels of 1, 2, 4, 8, 16, 32, 64g N m^-2yr^-1, respectively, by using an in situ static chamber method. The results showed that N₂O emission rates increased with increasing nitrogen addition rates. The emission rates showed significantly positive linear correlations with soil temperature, NO₃^--N, NH₄⁺-N, inorganic N, microbial biomass carbon, microbial biomass N, total soluble N, below-ground plant biomass and above-ground plant biomass, but a significantly negative correlation with soil pH. A structural equation modeling analysis showed that N addition affected in particular the pH value and subsequently N cycling and soil N₂O emission. Meteorological factors impacted N₂O emission rates through affecting soil environment and N cycling processes. The formulated “N₂O emission balance hypothesis” was supported and the balance point at which the N₂O emission rate became saturated was somewhere between 32 and 64 g N m^-2yr^-1. The plant N usage efficiency was highest when the rate of N addition was 2 g N m^-2yr^-1. The increased knowledge of environmental and plant control over soil N₂O emission provides a better understanding of N cycling within the semi-arid temperate grassland ecosystem and will be fundamental for quantifying N₂O budgets at various scales.