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Summary• The effects of nitrogen (N) deposition on the moss Racomitrium lanuginosum within montane heath in Scotland were investigated over 5 yr.• Permanent field plots were sprayed with KNO 3 or NH 4 Cl solutions, at doses equivalent to 10 and 40 kg N ha − 1 yr − 1 , in 3 -6 applications each summer.• Racomitrium growth and cover were severely reduced by N addition, whilst the proportion of dead shoots greatly increased. N dose decreased inducibility of shoot nitrate reductase activity (NRA), suggesting that N saturation of Racomitrium occurred, and caused an increase in potassium leakage. At high dosage, effects of NH 4 + were more detrimental than NO 3 -.• Physiological responses to N indicate that the habitat's critical load (CL) is exceeded by addition of 10 kg N ha − 1 yr − 1 . The differential toxicity of the two forms of N suggests that predominant ion type in deposition should be taken into consideration when CLs are set. In contrast to tissue N, NRA correlated well with shoot growth, and may thus be a useful biological indicator of moss condition.

Increased atmospheric nitrogen (N) deposition has been held responsible for the large‐scale invasion of graminoids (grasses, sedges and rushes) in a wide range of habitats from forests to upland heaths, causing dramatic changes in plant species composition. Concurrently with an increase in N deposition over the last century, livestock grazing has intensified in many parts of the world following policy reform, leading to large‐scale degradation of natural and seminatural ecosystems. On the basis of a series of experiments conducted in a Scottish montane ecosystem, we discovered that grazing and N deposition do not operate independently, and the interplay between them is leading to the replacement of valuable moss‐dominated habitat by grasses and sedges. Our study indicates that in setting ‘critical loads’ of N, widely used to minimize habitat degradation, it is necessary to account for substantial amplification of N‐deposition effects by grazing.