Global atmospheric nitrogen deposition has increased steadily since the 20th century, and has significantly changed the stability and productivity of terrestrial ecosystems, especially in the N-limited alpine grassland ecosystems. Although there have been many research reports on the effects of increased nitrogen deposition on grassland productivity and plant diversity, the ecosystem effects of nitrogen deposition varied depending on the climate zones, grassland types, nitrogen addition levels, nitrogen types and experiment duration. In this study, we manipulated the rates of nitrogen addition (0, 2, 5, 10, 15, 25, and 50 g N m^-2 a^-1) in an subalpine grassland in Qilian Mountains, China, between 2018 and 2019, and assessed the effect of the short-term simulated nitrogen deposition on plant species diversity and productivity. The results showed that nitrogen addition significantly increased the aboveground productivity of Gramineae (Elymus nutans, Leymus secalinus and Poa pratensis) and Cyperaceae (Kobresia humilis) and their proportion of the aboveground productivity in the community, which was mainly manifested in the significantly increased plant height and number of Gramineae and Cyperaceae with nitrogen addition. Compared to the Gramineae and Cyperaceae, nitrogen addition decreased the plant height and number for other families (Potentilla anserine and Carum carvi). In addition, the response of plant diversity to nitrogen addition was much slower than the response of the primary productivity, and the plant diversity generally decreased as the nitrogen addition rates increasing, although the decreased trend was not significant. Moreover, we found a significantly negative correlation between plant diversity and their productivity. These results showed that nitrogen addition could improve the productivity of both Gramineae and Cyperaceae, which subsequently improving the community productivity, whereas other families would be excluded gradually, leading to the loss of plant species diversity. Our results provide a synthetic understanding of the effects of simulated nitrogen deposition on plant species diversity and productivity in alpine grassland, as well as the theoretical basis for the sustainable management in subalpine Grassland in China.