Climate changes are altering precipitation to more frequent extreme precipitation events that have strong impacts on the structure and functions of grassland ecosystems. We conducted a rain simulation experiment combined with in situ 15 N labeling of three nitrogen (N) forms (NO3−, NH4+, glycine) to investigate how the frequency of extreme precipitation influences plant productivity and N acquisition (N uptake, 15 N recovery, and preference for N form) by the dominant species Stipa grandis and soil microorganisms in the temperate steppe. Extreme precipitation had three frequencies (1, 3, and 6 events for low, medium, and high frequency) with the same total rain amount in 1-month cycle. The low frequency reduced the S. grandis biomass by 39%, whereas the high ones raised the S. grandis biomass by 43% and increased plant and microbial N uptake up to 6.3-fold and 5.1-fold of those under ambient precipitation, respectively. Plants preferred NO3− and microorganisms preferred NH4+ under low frequency, but they showed similar preference for three N forms, leading to chemical niche overlap for NO3−, NH4+, and glycine under high frequency. This indicated that high precipitation frequency effectively reduced the proportion of each N form, which plants and microorganisms competed for as the available N pool increased. Overall, the increase of precipitation frequency (decreasing intensity) shifted the extreme (low frequency but high intensity) to optimal conditions for plant productivity and N acquisition by plants and microorganisms in the temperate steppe. These findings provide new insights for understanding the diverse responses of ecosystem functions to extreme climate events. © 2021, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.