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The montane grassland soils of Europe store significant amounts of nitrogen (N), and climate change might drive their volatilization due to the stimulation of gaseous nitrous oxide (N2O) and dinitrogen (N2) losses. Hence, a thorough, mechanistic understanding of the processes responsible for N loss and retention such as denitrification and dissimilatory nitrate reduction to ammonium (DNRA) in these soils is urgently needed. Here we aimed to explore the relationships between denitrifier gene abundance and expression with N2 and N2O production and the importance of DNRA versus denitrification in nitrate consumption and N2O production for typical montane grassland soils of Southern Germany. In a laboratory incubation experiment with glucose and nitrate addition, we combined direct measurements of N2O and N2 production with a molecular analysis of the denitrifier communities involved in nitrite, nitric oxide (NO) and N2O reduction and with the quantification of DNRA. The soils originated from a space-for-time climate change experiment, where intact plant-soil mesocosms were exposed for three years either to ambient conditions at a high elevation site ("HE" control treatment) or to predicted climate change conditions (warming, reduced summer precipitation and reduced winter snow cover) by translocation to lower elevation ("LE" climate change treatment). The abundance (DNA) of cnorB genes was significantly reduced in LE soils, whereas the abundance of nosZ genes did not differ between the HE and LE soils. However, the decreased abundance of cnorB genes unexpectedly resulted in slightly increased rather than decreased potential N2O emissions. This effect could be explained by the increased levels of cnorB mRNA and, therefore, the higher physiological activity of the NO reducers in the LE soils. In contrast with the DNA levels, the dynamics of the cnorB mRNA levels followed N2O emission patterns, whereas the nosZ expression was strongly correlated with the N2 emission (R2 = 0.83). The potential rates of DNRA were approximately one-third of the rates of denitrification, and DNRA was not a source for N2O. We conclude that DNRA significantly competes with denitrification in these soils, thus contributing to N conservation. This work demonstrates that the molecular analysis of nosZ gene expression has great potential to contribute to solving the enigmatic problem of understanding N2 loss from soil. [ABSTRACT FROM AUTHOR]