We followed soil C fluxes in a subalpine grassland system exposed to experimentally increased atmospheric N deposition for 7 years. Earlier we found that, different from the plant productivity response, the bulk soil C stock increase was highest at the medium, not the high N input as hypothesized. This implies that a smaller Ndeposition rate has a greater potential to favor the biological greenhouse gas-sink. To help elucidate the mechanisms controlling those changes in SOC in response to N deposition, we produced four soil density fractions and analyzed soil organic C concentration [SOC], as well as δ13C signatures (δ13CSOC) of SOC components. Soil respired CO2 (δ13CCO2) was analyzed to better distinguish seasonal short term dynamics from N-deposition effects and to identify the predominant substrate of soil respiration. Both at the start of the experiment and after 7 years we found a strong, negative correlation between [SOC] and δ13CSOC of the soil density fractions in the control treatment, consistent with an advanced stage of microbial processing of SOC in fractions of higher density. During the experiment the [SOC] increased in the two lighter density fractions, but decreased in the two heavier fractions, suggesting a possible priming effect that accelerated decomposition of formerly recalcitrant (heavy) organic matter pools. The seasonal pattern of soil δ13CCO2 was affected by weather and canopy development, and δ13CCO2 values for the different N treatment levels indicated that soil respiration originated primarily from the lightest density fractions. Surprisingly, [SOC] increases were significantly higher under medium N deposition in the<1.8 fraction and in bulk soil, compared to the high N treatment. Analogously, the depletion of δ13CSOC was significantly higher in the medium compared to the high N treatment in the three lighter fractions. Thus, medium N deposition favored the highest C sequestration potential, compared to the low N control and the high N treatment. Clearly, our results show that it is inappropriate to use plant productivity N response as an indicator for shifts in SOC content in grassland ecosystems. Here, isotopic techniques illustrated why atmospheric N deposition of 14 kg N ha−1 yr−1 is below, and 54 kg N ha−1 yr−1 is above a threshold that tips the balance between new, assimilative gains and respiratory losses towards a net loss of [SOC] for certain soil fractions in the subalpine grassland.