Increased atmospheric nitrogen (N) deposition and altered precipitation regimes have profound impacts on ecosystem functioning in semiarid grasslands. The interactions between those two factors remain largely unknown. A field experiment with N and water additions was conducted in a semiarid grassland in northern China. We examined the responses of aboveground net primary production (ANPP) and plant N use during two contrasting hydrological growing seasons. Nitrogen addition had no impact on ANPP, which may be accounted for by the offset between enhanced plant N uptake and decreased plant nitrogen use efficiency (NUE). Water addition significantly enhanced ANPP, which was largely due to enhanced plant aboveground N uptake. Nitrogen and water additions significantly interacted to affect ANPP, plant N uptake and N concentrations at the community level. Our observations highlight the important role of plant N uptake and use in mediating the effects of N and water addition on ANPP.