Aims In this study, we aimed to understand effects and mechanisms of legume species and their relative abundance on soil N, species recruitment, and productivity in mixed grassland. We also assessed the utilization prospect of several legumes in natural grassland. Methods In 2006, grass-legume combinations (GLCs) with different ratios (GLR) were established using Leymus chinensis and four legume species (Medicago ruthenica, Lespedeza daurica, Medicago falcata, and Medicago sativa). In 2009, plant and soil samples were taken to examine the differences in soil nitrogen (N) properties, biological N fixation (BNF), recruitment characteristics, and aboveground biomass of the community under different mixture patterns. Results Soil total N and available N concentration increased when legume component increased from GLR 1:0 (grass monoculture) to GLR 1:1 (grass:legume 1:1) but decreased as legume component increased further from GLR 1:3 (grass:legume 1:3) to GLR 0:1 (legume monoculture). GLR 1:1 had the highest BNF in most GLCs except for L. chinensis-M. falcata. For any GLR with legume, L. chinensis-M. sativa combination (L-MS) had higher soil total N, available N, water content, and BNF. The legume combinations with a GLR lower than 1:1 resulted in more species recruitments compared with the grass monoculture, and L-MS induced relatively more species recruitments than other GLCs, which were correlated with improved soil water and NO3−-N status. The grassland productivity increased as the GLR decreased; in any GLRs with legume, higher productivity was found under L-MS combination, and current results showed that grassland productivity was positively linked to soil NO3−-N availability influenced by grass-legume mixture. Conclusions We concluded that the species and relative abundance of legumes had great impact on soil N status, species recruitment, and productivity in this temperate grassland ecosystem. In this study site, legume introduction can be considered as an alternative to N fertilization for increasing grassland productivity. M. sativa has the greatest economic and ecological potential species to be mixed into natural temperate steppe grassland, and grass-legume ratio 1:1 is the best combination in mixed communities.