Urbanization is driving the transformation of natural and rural ecosystems worldwide by affecting both the abiotic environment and the biota. This raises the question whether urban ecosystems are able to provide services in a comparable way to their non-urban counterparts. In urban grasslands, the effects of urbanization-driven ecological novelty and the role of plant diversity in modulating ecosystem functioning have received little attention. In this study, we assessed the influence of biodiversity, abiotic and biotic novelty on ecosystem functioning based on in situ measurements in non-manipulated grasslands along an urbanization gradient in Berlin (Germany). We focused on plant aboveground biomass (AGB), intrinsic water-use efficiency (iWUE) and 15N enrichment factor (Δδ15N) as proxies for biomass production, water and N cycling, respectively, within grassland communities, and tested how they change with plant biogeographic status (native vs alien), functional group and species identity. Approximately one third of the forb species were alien to Berlin and they were responsible for 13.1% of community AGB. Community AGB was positively correlated with plant-species richness. In contrast, iWUE and Δδ15N were mostly determined by light availability (depicted by sky view factor) and urban parameters like the percentage of impervious surface or human population density. We found that abiotic novelty potentially favors aliens in Berlin, mainly by enhancing their dispersal and fitness under drought. Mainly urban parameters indicating abiotic novelty were significantly correlated to both alien and native Δδ15N, but to AGB and iWUE of alien plants only, pointing to a stronger impact of abiotic novelty on N cycling compared to C and water cycling. At the species level, sky view factor appeared to be the prevailing driver of photosynthetic performance and resource-use efficiency. Although we identified a significant impact of abiotic novelty on AGB, iWUE and Δδ15N at different levels, the relationship between species richness and community AGB found in the urban grasslands studied in Berlin was comparable to that described in non-urban experimental grasslands in Europe. Hence, our results indicate that conserving and enhancing biodiversity in urban ecosystems is essential to preserve ecosystem services related to AGB production. For ensuring the provision of ecosystem services associated to water and N use, however, changes in urban abiotic parameters seem necessary.