Desert grassland is predicted to be responsive to global climate change, such as increased atmospheric nitrogen deposition and precipitation. The structure, function and stability of plant community in desert grassland are often directly and indirectly affected by increased nitrogen deposition and precipitation. However, the response mechanism of plant community structure and stability in desert grassland to increase nitrogen deposition and precipitation are still not clear. We conducted the field experiments with water and nitrogen addition in desert grassland of Ningxia, China. We assessed the effects of increased atmospheric nitrogen deposition and precipitation on the plant community structure, species diversity and the plant community stability. The field experiment was conducted with four treatments, including control (CK), water addition (W), nitrogen addition (N), and water addition+nitrogen addition (W+N). We found that: (1) the plant community structure and aboveground biomass were effected significantly by water and nitrogen addition in desert grassland, but the plant community stability were not changed significantly(P>0.05). The plant aboveground biomass of Leguminosae and Gramineae were increased significantly by water addition (101.3% and 57.9%)(P<0.05). The coverage and aboveground biomass of plant community were significantly increased by 43.2% and 112.4% under water and nitrogen addition together, respectively. Water and nitrogen addition together also significantly increased the coverage (75.5% and 47.3%) and aboveground biomass (139.3% and 85.7%) of Leguminosae and Gramineae(P<0.05). Compared with nitrogen addition, water and nitrogen addition together significantly increased the height, coverage, aboveground biomass of plant community and different functional groups (Leguminosae and Gramineae)(P<0.05). (2) The Pielou index of plant community was decreased significantly by water addition, nitrogen addition, water and nitrogen addition together (11.7%, 8.7% and 10.2%)(P<0.05). (3) Plant community stability was improved by water addition, water and nitrogen addition together in desert grassland, while reduced by nitrogen addition. The effect of plant community stability by water addition was better than that of water and nitrogen addition together. The results indicated that the plant community structure would be affected by nitrogen deposition and precipitation increment in desert grassland. The positive effects of the increased precipitation on plant community stability in desert grassland may potentially offset negative effects of nitrogen deposition. Increased precipitation might lead to the increase of plant community aboveground biomass and plant community stability in desert grassland.