Growth of tallgrass prairie plants, many of which maintain substantial bud banks, can be limited by nitrogen (N), water, and/or light. We hypothesized that tallgrass prairie plants respond to increases in N through demographic effects on the bud bank. We tested the effects of a pulse of N on (1) bud bank demography, (2) plant reproductive allocation, and (3) ramet size. We parameterized matrix models, considering each genet as a population of plant parts. Nitrogen addition significantly impacted bud bank demography in two subdominant species of bunchgrass: Sporobolus heterolepis (a C(4) grass) and Koeleria macrantha (a C(3) grass), but had no effect on the size of individual ramets. Emergence from the bud bank and ramet population growth rates (λ) were significantly higher in S. heterolepis genets that received supplemental N. Nitrogen addition also affected the bud demography of K. macrantha, but N addition decreased rather than increased λ. Prospective and retrospective demographic analyses indicated that bud bank dynamics were the most important demographic processes driving plant responses to nutrient availability. Thus, the variation in productivity in these tallgrass prairie species is driven principally by the demography of the bud bank rather than by the physiology and growth of aboveground tillers. Improved understanding of bud bank dynamics may lead to improved predictive models of grassland responses to environmental changes such as altered N deposition and precipitation.