Nitrogen (N) retention is a critical ecosystem function for maintaining soil fertility and mitigating pollution caused by anthropogenic N input. However, it has not yet been elucidated how responses of plant and soil regulate ecosystem N retention. Here, we combined a 14-year N addition experiment in a temperate steppe with a global meta-analysis in grasslands, to assess changes in carbon (C) pool size and stoichiometric C:N ratio of plant and soil components and evaluate the contribution of each component to grassland N retention under increasing N levels. We found that N addition increased N storage in the plant pool by stimulating biomass production and reducing tissue C:N at the community level. However, the non-random loss of forbs and legumes associated with a low C:N ratio partially offset the decline in community-level C:N ratio, thereby diminishing the positive net effect of N enrichment on plant N storage. The observed increase in soil N storage was predominantly determined by the decrease in C:N ratio of topsoil, while no changes were detected in the subsoil. On 14-year time scale, the upper limitation of N retention capacity in our study site was 167.02 g N/m². Global metaanalysis further indicated that a decade’s N addition significantly increased the N storage in shoot, root and topsoil through enhancing the C pool and decreasing the C:N ratio, while did not affect those of subsoil. However, the positive correlation between the response of subsoil N storage and treatment duration further indicates that, though the accumulation of added N lagged behind that of topsoil, subsoil could play an important role in N retention on a longer time scale. Our study demonstrated that the enhanced plant productivity and altered physiological metabolism indicated by the decreased C:N ratio jointly determined grassland ecosystem N retention. The capacity of the grassland ecosystem to retain exogenous N input is limited, especially for a large amount of N input that occurs in a short period. However, in the context of chronically rising N deposition, the long-term N retention capacity of grasslands should largely depend on the response of subsoil, especially after topsoil N is saturated.