Increased nitrogen (N) deposition is common worldwide. Questions of where, how, and if reactive N-input influences soil carbon (C) sequestration in terrestrial ecosystems are of great concern. To explore the potential for soil C sequestration in steppe region under N and phosphorus (P) addition, we conducted a field experiment between 2006 and 2012 in the temperate grasslands of northern China. The experiment examined 6 levels of N (0–56 g N m-2 yr-1), 6 levels of P (0–12.4 g P m-2 yr-1), and a control scenario. Our results showed that addition of both N and P enhanced soil total C storage in grasslands due to significant increases of C input from litter and roots. Compared with control plots, soil organic carbon (SOC) in the 0–100 cm soil layer varied quadratically, from 156.8 to 1352.9 g C m-2 with N addition gradient (R2 = 0.99, P < 0.001); and logarithmically, from 293.6 to 788.6 g C m-2 with P addition gradient (R2 = 0.56, P = 0.087). Soil inorganic carbon (SIC) decreased quadratically with N addition. The net C sequestration on grassland (including plant, roots, SIC, and SOC) increased linearly from -128.6 to 729.0 g C m-2 under N addition (R2 = 0.72, P = 0.023); and increased logarithmically, from 248.5 to 698 g C m-2under P addition (R2 = 0.82, P = 0.014). Our study implies that N addition has complex effects on soil carbon dynamics, and future studies of soil C sequestration on grasslands should include evaluations of both SOC and SIC under various scenarios.