We investigated the effects of spring barley growth on nitrogen (N) transformations and rhizosphere microbial processes in a controlled system under elevated carbon dioxide (CO2) at two levels of N fertilization (applied with 15N labelling). After 25 d, elevated CO2 (twice ambient) increased plant growth (dry weight, DW) by 141% at low-N fertilization and by 60% at high-N fertilization, but its positive effect on the root-to-shoot ratio was only significant at low-N input. As a result of this plant response, elevated CO2 caused a greater soil CO2 efflux, rhizosphere soil DW, and soil microbial biomass under N-limiting conditions than under high N availability. Elevated CO2 also caused a significant (P < 0.001) increase in the N recovered by the plant from both the labelled (Nf) and unlabelled (Ns + Nuf) N pools. The dynamics of N in the system as affected by elevated CO2 were driven principally by mineralization–immobilization turnover, with little loss by denitrification. Under N-limiting conditions, there is evidence to suggest enhanced nutrient release from soil organic matter (SOM) pools—a process which could be defined as priming. The results of our experiment did not indicate a direct plant-mediated effect of elevated CO2 on nitrous oxide (N2O) fluxes or denitrification activity.