The ecological consequences of precipitation change and increased atmospheric nitrogen (N) deposition have profound impacts on ecosystem CO₂ exchange in grassland ecosystems. Water and N can largely influence grassland productivity, community composition and ecosystem functions. However, the influences of water and N addition on the ecosystem CO₂ exchange of alpine grassland ecosystems remain unclear. A field manipulative experiment with water and N additions was conducted in an alpine meadow on the Tibetan Plateau over 4 years with contrasting precipitation patterns. There were four treatments: control (Ctrl), N addition (N), water addition (W) and N and water addition (NW), each replicated three times. N addition, but not water addition, increased gross ecosystem productivity (GEP), plant biomass, community cover and community-weighted mean height. The responses of ecosystem CO₂ exchange to water and N addition varied between the wet and dry years. Water addition had a positive effect on net ecosystem carbon exchange (NEE) due to a larger increase in GEP than in ecosystem respiration (ER) only in the dry year. On the contrary, N addition significantly enhanced ecosystem CO₂ exchange only in the wet year. The increased GEP in N addition was attributed to the larger increase in NEE than ER. Moreover, N addition stimulated NEE mainly through increasing the cover of dominant species. Our observations highlight the important roles of precipitation and dominant species in regulating ecosystem CO₂ exchange response to global environmental change in alpine grasslands.