Reseeding with native plants to rebuild alpine meadow has become a popular way of ecological restoration. However, the harsh environment poses a great challenge to the establishment of native plants due to poor management of water and nutrients. How water–fertilizer interaction influences dominant grass species is still unclear, and reasonable water and fertilizer conditions are still not determined. Our results showed that addition of nitrogen could mitigate the photosynthetic and water-use traits caused by water stress, i.e., a reduction in Pn and water use results from fewer and thinner leaves, weak stomatal traits, etc. Compared to the control, the peak Pn values of Poa crymophila, Festuca coelestis, and Stipa purpurea increased significantly (71.2%, 108.4%, and 25.4%, respectively). Under drought stress, Pn tended to decrease due to reduced stomatal conductance (Gs). However, appropriate fertilization buffered against Pn decreases by altering the stomatal size and regulating the Gs. Based on reduced water consumption, the water-use efficiency of P. crymophila and F. coelestis decreased whereas that of S. purpurea increased. WHFH for P. crymophila and F. coelestis and WHFL for S. purpurea growth were suitable for the alpine region. WHFH for P. crymophila and F. coelestis and WHFL for S. purpurea were suitable for their establishment in the alpine region. A reasonable water–fertilizer combination could effectively reduce the risk of establishment failure in ecological restoration.