Atmospheric nitrogen deposition has inconsistent effects on grassland carbon (C) fluxes. Whether its effects are influenced by other global change drivers such as plant diversity decline, and whether grassland management (livestock grazing/mowing) can regulate these effects remain unclear. We performed a 6-year field manipulative experiment to examine the interactive effects of nitrogen addition, plant diversity decline, and moderate grassland use by livestock grazing and mowing on ecosystem C fluxes. Throughout three consecutive years (2018–2020), we measured net ecosystem CO2 exchange (NEE) as the balance of gross ecosystem production (GEP) and ecosystem respiration (ER), on a monthly basis during the growing season (from May to September). We found that declines in plant diversity led to a reduction in NEE, whereas moderate grassland use resulted in an increase. The impact of nitrogen addition on NEE was contingent on specific context of grassland plant diversity and grazing/mowing utilization. Specifically, nitrogen addition had no effect on NEE in communities with high plant diversity while reduced NEE in communities with low diversity. However, in low plant diversity communities with grazing/mowing utilization, nitrogen addition increased NEE. Structural equation models further revealed that the combined effects of global changes (nitrogen addition and diversity decline) and grassland use (livestock grazing and mowing) on carbon exchange was regulated primarily by aboveground biomass. Our results indicate that moderate grassland use can reverse the negative effects of nitrogen addition on NEE in the low-diversity community. Our results highlight the potential of moderate grassland use as an effective management strategy for the enhancement of grassland C sequestration under ongoing global changes such as nitrogen deposition and biodiversity loss.