Atmospheric nitrogen (N) deposition has caused concern due to its effects on litter decomposition in subtropical regions where N-fixing tree species are widespread. However, the effect of N deposition on litter decomposition in N-fixing plantations remains unclear. We investigated the effects of a 2-year N deposition treatment on litter decomposition, microbial activity, and nutrient release in two subtropical forests containing Alnus cremastogyne (AC, N-fixing) and Liquidambar formosana (LF, non-N-fixing). The decomposition rate in AC was faster than in LF when there was no experimental N deposition. In AC, the initial decomposition rate was faster when additional N was applied and was strongly linked to higher cellulose-degrading enzyme activities during the early decomposition stage. However, N deposition reduced litter decomposition and inhibited lignin-degrading enzyme activities during the later decomposition stage. Nitrogen deposition enhanced carbohydrate and alcohol utilization, but suppressed amino acid and carboxylic acid uptake in the AC plantation. However, it did not significantly affect litter decomposition and microbial activity in the LF plantation. In conclusion, N deposition could inhibit litter decomposition by changing microbial enzyme and metabolic activities during the decomposition process and would increase carbon accumulation and nitrogen retention in subtropical forests with N-fixing tree species.