On dairy farms, fertilization of grass-clover swards ensures stable grass yields but may increase the potential for nitrate leaching on light-textured soils. The aim of this study was to quantify the N use efficiency and nitrate leaching under fertilized grass-clover leys. The study was conducted over 2 years at two sites, with increasing applications of mineral fertilizer (0–480 kg available N ha−1) alone or in combination with a basic application of cattle slurry. For plots fertilized with mineral N, the N soil surface balance was independent of the application rate and in the same range as for unfertilized plots (− 11 to 51 kg N ha−1). However, when plots were fertilized with slurry N (+ mineral N), the surplus was substantially increased owing to the fraction of organic N applied in slurry (95–100 kg N ha−1) and higher biological N2 fixation inputs (55–228 kg N ha−1). The type of fertilizer had no effect on nitrate leaching across the full range of application rates. Nitrate leaching increased quadratically as a function of application rate, with a range of 3–117 kg N ha−1 (0.33–17 mg l−1 in soil solution sampled with suction cups) in the first year and less in the second year, when clover proportion was lower due to the self-regulatory nature of grass-clover mixtures. Importantly, the rate of marginal leaching increased with fertilization level: below 150 kg N ha−1 there was no additional leaching from fertilization and at 200 kg N ha−1 around 5% of additional fertilizer-N was leached. This is less than generally found for arable crops and thus even in intensive dairy systems, grass-clover leys are an environmentally favorable crop.