Aims Climate change is expected to intensify drought and heatwaves, with major consequences for nutrient cycling in grasslands. Plant-soil-microbe interactions regulate nitrogen (N) dynamics, yet their responses to simultaneous warming and drought remain unclear, especially across plant species and land management histories. Methods We conducted a factorial warming and drought manipulation to six temperate grassland species (grasses, forbs, and legumes) grown in soils from intensively (Int) and extensively (Ext) managed grasslands. We quantified nitrogen (N) content and biomass production across four compartments: soil, microbes, roots, and shoots. Results Under control and warming conditions, Int soils supported up to 50% higher plant biomass than Ext soils, but this advantage disappeared under drought, which reduced plant biomass by ~ 40%. Warming consistently reduced microbial biomass by up to 30% in both soil types. In contrast, drought decreased microbial biomass in Int soils but increased it by ~ 20% in Ext soils, likely reflecting their more drought-resistant fungal communities. These changes altered N flows: extractable soil N was up to three times higher in Int soils under warming and drought, indicating greater vulnerability to N losses, whereas Ext soils maintained low extractable soil N except under combined stress. Conclusions Our findings show that intensive management boosts plant biomass under mild and warm conditions but increases susceptibility to N loss during climate extremes, while extensive management supports more stable biomass and N cycling. Integrating microbial dynamics and land-use history is therefore essential for predicting grassland resilience and improving models of N cycling under global change.