Backgrounds <p>Global nitrogen (N) deposition is greatly impacting dryland ecosystems, especially biodiversity and above-ground biomass (AGB). AGB typically exhibits a saturation response to N addition, however, the N saturation thresholds and driving mechanisms remain poorly understood.</p> Methods <p>In both herbaceous and shrub communities of desert steppe, we conducted a five-year N addition experiment with eight levels to test AGB response. Also, we examined how three biodiversity facets (taxonomic, functional and phylogenetic diversity) and soil properties drive AGB.</p> Results <p>We found the N saturation thresholds for the response of AGB to N addition, with higher thresholds in herbaceous (N24 g m⁻²&#xa0;year⁻¹) than shrub communities (N12 g m⁻²&#xa0;year⁻¹). N addition promoted shifts in dominant species from conservative species to acquisitive species in herbaceous communities, supporting the two-order resource dynamics hypothesis, but this effect was minor in shrub communities. CWM trait values of SLA, LNC and height were key modulators of AGB under N addition, supporting the mass ratio hypothesis. In herbaceous communities, CWM _SLA modulated the effects of N addition on AGB across eight N addition levels and before N saturation thresholds, and CWM _LNC did after N saturation thresholds. In shrub communities, the effects of N addition on AGB were primarily modulated by variations in CWM _height, particularly shrubs height.</p> Conclusion <p>This study provides new insights into the different N saturation thresholds for AGB in herbaceous and shrub communities, and highlights that CWM trait values modulates the effects of N addition on AGB. Our findings fill the knowledge gaps concerning how desert steppe AGB responds to a wider N addition gradient and driving mechanisms, providing the theoretical basis and guidance for policy formulation to enhance vegetation restoration.</p>