1. Ecosystem stability is threatened by multiple global change factors such as drought and elevated nitrogen deposition. Yet, it is still poorly understood whether soil organisms can buffer against such perturbations. Here we focus on arbuscular mycorrhizal fungi (AMF), a common and widespread group of soil fungi. AMF form symbiotic associations with the majority of terrestrial land plants and promote a range of ecosystem services including plant production, diversity and nutrient cycling. 2. We tested whether AMF have the ability to enhance the resistance and resilience of plant communities under soil moisture deficit (hereby drought) and nitrogen deposition. Grassland microcosms with 11 different plant species were established with and without AMF and exposed to elevated nitrogen levels and to an intermittent period of drought. 3. Drought strongly reduced plant productivity and nitrogen cycling, but had limited effects on plant diversity. Nitrogen enrichment reduced plant diversity and increased nitrogen leaching and N2O emissions. The presence of AMF enhanced plant productivity, plant diversity and reduced nitrogen losses. AMF facilitated the resistance of plant productivity and nitrogen cycling to drought and the recovery of the plant community structure back to its pre drought state. Furthermore, AMF also mitigated the adverse effects of nitrogen enrichment on the resistance of multiple ecosystem functions to drought. 4. Synthesis. Our work highlights the integral role of AMF for the stability of ecosystem functioning; AMF are not only able to promote resistance to harsh conditions of global change but also improve resilience by enabling plant communities to recover. These findings underline AMF's insurance capacity to buffer ecosystems against global change.