We present a new formulation of the acidification model MAGIC that uses decomposer dynamics to link nitrogen (N) cycling to carbon (C) turnover in soils. The new model is evaluated by application to 15-30 years of water chemistry data at three coniferous-forested sites in the Czech Republic where deposition of sulphur (S) and N have decreased by >80% and 40%, respectively. Sulphate concentrations in waters have declined commensurately with S deposition, but nitrate concentrations have shown much larger decreases relative to N deposition. This behaviour is inconsistent with most conceptual models of N saturation, and with earlier versions of MAGIC which assume N retention to be a first-order function of N deposition and/or controlled by the soil C/N ratio. In comparison with earlier versions, the new formulation more correctly simulates observed short-term changes in nitrate leaching, as well as long-term retention of N in soils. The model suggests that, despite recent deposition reductions and recovery, progressive N saturation will lead to increased future nitrate leaching, ecosystem eutrophication and re-acidification.