Elevated nitrogen (N) inputs into terrestrial ecosystems are causing major changes to the composition and functioning of ecosystems. Understanding these changes is challenging because there are complex interactions between 'direct' effects of N on plant physiology and soil biogeochemistry, and 'indirect' effects caused by changes in plant species composition. By planting high N and low N plant community compositions into high and low N deposition model terrestrial ecosystems we experimentally decoupled direct and indirect effects and quantified their contribution to changes in carbon, N and water cycling. Our results show that direct effects on plant growth dominate ecosystem response to N deposition, although long-term carbon storage is reduced under high N plant-species composition. These findings suggest that direct effects of N deposition on ecosystem function could be relatively strong in comparison with the indirect effects of plant community change.