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Nitrogen (N) enrichment has direct effects on ecosystem functioning by altering soil abiotic conditions and indirect effects by reducing plant diversity and shifting plant functional composition from dominance by slow to fast growing species. Litter decomposition is a key ecosystem function and is affected by N enrichment either by a change in litter quality (the recalcitrance of the plant material) or through a change in soil quality (the abiotic and biotic components of the soil that affect decomposition). How the direct and indirect effects of N alter soil and litter quality remains poorly known.We designed a large grassland field experiment manipulating N enrichment, plant species richness and functional composition in a full factorial design. We used three complementary litterbag experiments, combined in a structural equation model (SEM), to quantify the effects of the treatments and various measures of functional composition and diversity on litter and soil quality and overall decomposition.Our results revealed multiple drivers of litter quality and showed that nutrient concentrations (N and calcium) were about twice as important as structural components (leaf dry matter content, fibres) in determining litter quality. Overall the experimental results suggest that N enrichment increases litter decomposition mostly indirectly through a shift in functional composition toward faster growing plant species, producing higher quality litter. N enrichment also altered soil quality and thereby litter decomposition, through its effects on vegetation cover.Our approach provides a mechanistic tool to test the drivers of litter decomposition across different ecosystems. Our results show that litter quality is determined by several nutrient and structure traits and highlight the importance of considering shifts in plant species composition when assessing the effects of N enrichment on decomposition. [ABSTRACT FROM AUTHOR]