Models predict that vertical gradients of foliar nitrogen (N) allocation, increasing from bottom to top of plant canopies, emerge as a plastic response to optimise N utilisation for carbon assimilation. While this mechanism has been well documented in monocultures, its relevance for mixed stands of varying species richness remains poorly understood. We used 21 naturally assembled grassland communities to analyse the gradients of N in the canopy using N allocation coefficients (K N ) estimated from the distribution of N per foliar surface area (KN-F) and ground surface area (KN-G). We tested whether: 1) increasing plant species richness leads to more pronounced N gradients as indicated by higher K N -values, 2) K N is a good predictor of instantaneous net ecosystem CO2 exchange and 3) functional diversity of leaf N concentration as estimated by Rao's Q quadratic diversity metric is a good proxy of K N . Our results show a negative (for KN-G) or no relationship (for KN-F) between species richness and canopy N distribution, but emphasize a link (positive relationship) between more foliar N per ground surface area in the upper layers of the canopy (i.e. under higher KN-G) and ecosystem CO2 uptake. Rao's Q was not a good proxy for either K N .