Background <p>Soil microbial carbon use efficiency (CUE) determines the partitioning of metabolized organic carbon into microbial growth versus respiration, reflecting dual pathways whereby microorganisms mediate both the accumulation and loss of soil organic carbon. However, the responses of CUE to environmental change, including nitrogen (N) deposition and plant cover, remain poorly understood.</p> Methods <p>We measured CUE of soil samples collected under the shrub canopy and in open areas devoid of vascular plants in a desert of the Tibetan Plateau that is characterized by patchy vegetation and exposed to 4-years of N addition.</p> Results <p>Our study revealed distinct mechanisms by which shrub cover and N addition regulate microbial CUE. Notably, N addition induced a significant 39% decrease in microbial CUE specifically in soil under shrub canopy, mediated through its negative effect on soil enzyme activities. In contrast, shrub cover (characterized by the presence or absence of shrubs) exerted a dominant positive influence on CUE, accounting for 84% of the observed enhancement through its stimulation of soil enzyme activities and increases in soil water content, carbon, and N availability. Importantly, this plant-mediated effect was associated with two key microbial adaptations: reduced microbial genome size and increased CUE under greater shrub cover. Our study provided empirical evidence of multiple pathways regulating CUE changes with shrub cover and N addition, and their interaction.</p> Conclusions <p>Shrub cover enhances soil microbial CUE via improved soil conditions and microbial adaptation, while N addition under shrubs reduces it, highlighting the feedback between plant and soil in influencing soil carbon dynamics.</p>