The increasing availability of soil mineral nitrogen is often considered as a cause of expansion of nitrogen-demanding tall grasses into oligotrophic species-rich heathlands and dry grasslands dominated by Festuca ovina. Consequently these ecosystems tend to lose their biodiversity. This paper summarizes the main results of diffrent studies focused on the soil nitrogen transformation and availability in the heathlands and dry grasslands in the Podyjí National Park (southern Czech Republic). Increasing soil mineral nitrogen availability accelerates expansion of competitive tall grasses Calamagrostis epigejos and Arrhenatherum elatius there. Subsequently, due to higher plant and microbial demands for soil mineral nitrogen, the soil nitrogen availability in the tall-grass sites decreases. At the same time, experimental addition of carbon in the form of cellulose into dry grassland decreased nitrogen availability, which indicates that such ecosystem needs more carbon to effctively use the current levels of available soil nitrogen. Substantial diffrences between A. elatius a C. epigejos were found in their capability to (i) accumulate nitrogen in plant tissues, (ii) resorb nitrogen from above-ground biomass during senescence and (iii) release nitrogen from plant littr during decomposition. These observations point out to diffrent growth and nutrient use strategies of the studied grass species and associated microbial communities in the rhizosphere.