Populations of Arnica montana, a characteristic species of nutrient poor grasslands in Central Europe, have been deteriorating over the last decades, especially in lowland regions. Population size has been declining and signs of sexual reproduction are scarce. To start a long-term regeneration program, we investigated the major habitat specific drivers for the decline in Hesse, Germany. Firstly, we conducted a field study to analyze habitat characteristics of 32 Hessian lowland sites, comparing those on which this species has become extinct during the last 15 years with sites of small and declining, as well as large, stable populations. We compared habitat traits focusing on soil parameters, nutrients, and vegetation characteristics. Secondly, we set up a greenhouse experiment to study the response of A. montana seedlings to competition and nutrient input to assess the effects of competition pressure and fertilization. The results show lower carbon-to-nitrogen ratios and higher Ellenberg nitrogen indicator values on sites with extinct populations compared to existing populations. Both pH and Ellenberg soil reaction indicator values were higher on sites with extinct populations. In the greenhouse, the combination of nitrogen addition and competition resulted in lower seedling numbers. While rosette size was not dependent on fertilization, growth was strongly enhanced in the plots lacking vegetation. Both studies suggest that soil nutrient enrichment followed by competition pressure diminishes the number of safe sites for A. montana seedling recruitment and establishment and negatively impacts the growth of existing rosettes, thus leading to the continuous decline of populations. There is an urgent need for actions to reduce unintentional nitrogen deposition in the remaining nutrient poor areas as well as to modify land use to withdraw nutrients from enriched soils in order to preserve the remaining A. montana populations and to create bare ground for the safekeeping and enhancement of self-sustainable populations.