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A widespread pattern of the Tibetan plateau is mosaics of grasslands of Cyperaceae and grasses with forbs, interspersed with patches covered by lichen crusts induced by overgrazing. However, the fate of inorganic and organic N in non-crusted and crusted patches in Kobresia grasslands remains unknown. We reported on a field 15N-labeling experiment in two contrasting patches to compare retention of organic and inorganic N over a period of 29 days. 15N as KNO3, (NH4)2SO4 or glycine was sprayed onto soil surface. Crusted patches decreased plant and soil N stocks. More 15N from three N forms was recovered in soil than plants in both patches 29 days after the labeling. In non-crusted patches, 15N recovery by the living roots was about two times higher than in crusted ones, mainly because of higher root biomass. Microorganisms in non-crusted patches were N-limited because of more living roots and competed strongly for N with roots. Inorganic N input to non-crusted patches could alleviate N limitation to plants and microorganisms, and leads to higher total 15N recovery (plant + soil) for inorganic N forms. Compared to non-crusted patches, microorganisms in crusted patches were more C-limited because of depletion of available C caused by less root exudation. Added glycine could activate microorganisms, together with the hydrophobicity of glycine and crusts, leading to higher 15N-glycine than inorganic N. We conclude that overgrazing-induced crusts in Kobresia grasslands changed the fate of inorganic and organic N, and lead to lower total recovery from inorganic N but higher from organic N. Copyright © 2016 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]