Grasslands are now facing a continuously increasing supply of nitrogen (N) fertilizers, resulting in alterations in ecosystem functioning, including changes in carbon (C) and water cycling. Mowing, one of the most widely used grassland management techniques, has been shown to mitigate the negative impacts of increased N availability on species richness. However, knowledge of how N addition and mowing, alone and/or in combination, affect ecosystem-level C fluxes and water use efficiency (WN) is still limited. We experimentally manipulated N fertilization (0 and 10 g N m−2 yr−1) and mowing (once per year at the end of the growing season) following a randomized block design in a meadow steppe characterized by salinization and alkalinization in northeastern China. We found that, compared to the control plots, N addition, mowing, and their interaction increased net ecosystem CO2 exchange by 65.1%, 14.7%, and 133%, and WN by 40.7%, 18.5%, and 96.1%, respectively. Nitrogen enrichment also decreased soil pH, which resulted in greater aboveground biomass (AGB). Moreover, N addition indirectly increased AGB by inducing changes in species richness. Our results indicate that mowing enhances the positive effects of N addition on ecosystem C fluxes and WN. Therefore, appropriate grassland management practices are essential to improve ecosystem C sequestration, WN, and mitigate future species diversity declines due to ecosystem eutrophication.