Global nitrogen (N) enrichment and changing precipitation regimes are likely to alter plant community structure and composition, with consequent influences on biodiversity and ecosystem functioning. Responses of plant community structure and composition to N addition and increased precipitation were examined in a temperate steppe in northern China. Increased precipitation and N addition stimulated and suppressed community species richness, respectively, across 6 years (2005–2010) of the manipulative experiment. N addition and increased precipitation significantly altered plant community structure and composition at functional groups levels. The significant relationship between species richness and soil moisture (SM) suggests that plant community structure is mediated by water under changing environmental conditions. In addition, plant height played an important role in affecting the responses of plant communities to N addition, and the effects of increased precipitation on plant community were dependent on species rooting depth. Our results highlight the importance and complexity of both abiotic (SM) and biotic factors (species traits) in structuring plant community under changing environmental scenarios. These findings indicate that knowledge of species traits can contribute to mechanistic understanding and projection of vegetation dynamics in response to future environmental change.