Subtropical woodlands dominated by N-fixing tree legumes have largely replaced grasslands in the Rio Grande Plains, southwestern United States, during the past century. To evaluate the impact of this vegetation change on the N cycle, we measured the mass and isotopic composition (δ15N) of N in the soil system of remnant grasslands and woody plant stands ranging in age from 10 to 130 years. Nitrogen accumulated at linear rates following woody encroachment in the litter (0.10–0.14 g N m−2 yr−1), roots (0.63–0.98 g N m−2 yr−1), and soils (0.75–3.50 g N m−2 yr−1), resulting in a 50%–150% increase in N storage in the soil system (0–30 cm) in woody stands older than 60 years. Simultaneous decreases in soil δ15N of up to 2‰ in the upper 30 cm of the profile are consistent with a scenario in which N inputs have exceeded losses following woody encroachment and suggest N accrual was derived from symbiotic N fixation by tree legumes and/or differential atmospheric N deposition to wooded areas. Vertical uplift and lateral transfer of N by the more deeply and intensively rooted woody plants may have contributed to N accumulation in wooded areas, but soil δ15N values are inconsistent with this explanation. N accumulation following woody encroachment may alter soil N availability, species interactions and successional dynamics, flux rates of key trace gases such as NOX and N2O and ecosystem C sequestration. Given the geographic dimensions of woody encroachment, these results may have implications for atmospheric composition and the climate system.