Nitrogen (N) applications can have a significant effect on soil N availability. The effect of 3 years of N fertilization on soil net N mineralization during the growing season (May–September) was studied in 2005 and 2006 in grassland of northern China. The experimental design was a randomized complete block with four replications of five rates of N addition as urea (0, 2, 4, 8 and 16 g N m−2 year−1). Results indicated that net N mineralization rate varied seasonally and between years, ranging from −0.04 to 0.52 μg g−1 d−1 in 2005 and from −0.09 to 0.39 μg g−1 d−1 in 2006. Mean N mineralization and nitrification rates were highest in July, in 2005 and 2006, whereas highest ammonification rates occurred in September. Rainfall was significantly correlated with net nitrification. In comparison with the untreated control, N mineralization increased sharply when N fertilization increased from 2 to 8 g N m−2 year−1. Mobile soil NO3− accumulated late in the growing season for the 16 g N m−2 year−1 treatment, suggesting the potential for NO3 and associated cation leaching. These results suggest that N fertilization of 8 g N m−2 year−1 (80 kg N ha−1) is suitable for the management of grassland ecosystems of Inner Mongolia.