Biodiversity is expected to improve ecosystem services, e.g., productivity or seepage water quality. The current view of plant diversity effects on element cycling is based on short-term grassland studies that discount possibly slow belowground feedbacks to aboveground diversity. Furthermore, these grasslands were established on formerly arable land associated with changes in soil properties, e.g., accumulation of organic matter. We hypothesize that the plant diversity-N cycle relationship changes with time since establishment. We assessed the relationship between plant diversity and (1) aboveground and soil N storage and (2) NO3-N and NH4-N availability in soil between 2003 and 2007 in the Jena Experiment, a grassland experiment established in 2002 in which the number of plant species varied from 1 to 60. The positive effect of plant diversity on aboveground N storage (mainly driven by biomass production) tended to increase through time. The initially negative correlation between plant diversity and soil NO3-N availability disappeared after 2003. In 2006 and 2007, a positive correlation between plant diversity and soil NH4-N availability appeared which coincided with a positive correlation between plant diversity and N mineralized from total N accumulated in soil. We conclude that the plant diversity-N cycle relationship in newly established grasslands changes with time because of accumulation of organic matter in soil associated with the establishment. While a positive relationship between plant diversity and soil N storage improves soil fertility and reduces fertilizing needs, increasingly closed N cycling with increasing plant diversity as illustrated by decreased NO3-N concentrations in diverse mixtures reduces the negative impact of agricultural N leaching on groundwater resources.