It is unclear whether the shift in leaf traits between species of high- and low-rainfall sites is caused by low rainfall or by species replacement, because leaf traits vary substantially among species and sites. Our objective was to test if the within-species relationship between specific leaf area (SLA) and leaf N concentration (Nmass) shifts across a rainfall gradient in the semi-arid sandy lands of northern China. Data for SLA and Nmass of dominant species and related canopy and soil variables were collected from 33 plots along a rainfall transect (270–390 mm) having similar temperatures in the Mu Us, Inner Mongolia. We further investigated the generality of Mu Us data using 12 additional plots in the southeastern Qaidam Basin, Qinghai. Artemisia ordosica is a widespread species in both regions. Across and within species, the positive SLA–Nmass relationship shifted between two plant groups in the lowest rainfall plots (270 mm) and other higher rainfall plots (320–390 mm), which was confirmed by additional data from Qinghai. For A. ordosica populations, leaf area index (LAI) decreased and Nmass increased with decreasing rainfall, while the foliage N pool and SLA varied little. Rainfall was the limiting factor that determined variations in Nmass and LAI. Accordingly, Nmass/SLA ratios continually increased with decreasing LAI along the rainfall gradient (r = −0.76, P < 0.001). Results indicate a low rainfall-induced shift in the SLA–Nmass relationship associated with changes in LAI and foliage N pool, suggesting a link between leaf characteristics and ecosystem function.