Synergistic effects on decomposition in litter mixtures have been suggested to be due to the transfer of nitrogen from N‐rich to N‐poor species. However, the dominant pathway and the underlying mechanisms remain to be elucidated. We conducted an experiment to investigate and quantify the control mechanisms for nitrogen transfer between two litter species of contrasting nitrogen status (15N labeled and unlabeled Fagus sylvatica and Fraxinus excelsior) in presence and absence of micro‐arthropods. We found that 15N was predominantly transferred actively aboveground by saprotrophic fungi, rather than belowground or passively by leaching. However, litter decomposition remained unaffected by N‐dynamics and was poorly affected by micro‐arthropods, suggesting that synergistic effects in litter mixtures depend on complex environmental interrelationships. Remarkably, more 15N was transferred from N‐poor beech than N‐rich ash litter. Moreover, the low transfer of 15N from ash litter was insensitive to destination species whereas the transfer of 15N from labeled beech litter to unlabeled beech was significantly greater than the amount of 15N transferred to unlabeled ash suggesting that processes of nitrogen transfer fundamentally differ between litter species of different nitrogen status. Microbial analyses suggest that nitrogen of N‐rich litter is entirely controlled by bacteria that hamper nitrogen capture of microbes in the environment supporting the source‐theory. In contrast, nitrogen of N‐poor fungal dominated litter is less protected and transferable depending on the nitrogen status and the transfer capacity of the microbial community of the co‐occurring litter species supporting the gradient‐theory. Thus, our results challenge the traditional view regarding the role of N‐rich litter in decomposing litter mixtures. We rather suggest that N‐rich litter is only a poor nitrogen source, whereas N‐poor litter, can act as an important nitrogen source in litter mixtures. Consequently both absolute and relative differences in initial litter C/N ratios of co‐occurring litter species need to be considered for understanding nitrogen dynamics in decomposing litter mixtures.