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Belowground plant traits play important roles in plant diversity loss driven by atmospheric nitrogen (N) deposition. However, the way N enrichment shapes plant microhabitats by patterning belowground traits and finally determines aboveground responses is poorly understood. Here, we investigated the rhizosheath trait of 74 plant species in seven N-addition simulation experiments across multiple grassland ecosystems in China. We found that rhizosheath formation differed among plant functional groups and contributed to changes in plant community composition induced by N enrichment. Compared with forb species, grass and sedge species exhibited distinct rhizosheaths; moreover, grasses and sedges expanded their rhizosheaths with increasing N-addition rate which allowed them to colonize belowground habitats. Grasses also shaped a different microenvironment around their roots compared with forbs by affecting the physicochemical, biological, and stress-avoiding properties of their rhizosphere soil. Rhizosheaths act as a "biofilm-like shield" by the accumulation of protective compounds, carboxylic anions and polysaccharides, determined by both plants and microorganisms. This enhanced the tolerance of grasses and sedges to stresses induced by N enrichment. Conversely, forbs lacked the protective rhizosheaths which renders their roots sensitive to stresses induced by N enrichment, thus contributing to their disappearance under N-enriched conditions. This study uncovers the processes by which belowground facilitation and trait matching affect aboveground responses under conditions of N enrichment, which advances our