Nitrogen deposition and extreme droughts have been accelerated by anthropogenic activities. Studying effect of nitrogen addition on grassland vegetation contributes to understanding response of grassland ecosystem to nitrogen deposition and global change. Nitrogen addition experiment was done during grassland drought period in the summer of 2014 in Inner Mongolia. Effect of nitrogen level (0, 4, 8, 16 g ·m~(-2)) on photosynthetic characteristics of Stipa krylovii was examined. It was found that proper nitrogen addition could improve photosynthetic responses of Stipa krylovii. The nitrogen addition level for optimal response of fluorescence characteristics of Stipa krylovii was 4 or 8 g ·m~(-2). Stipa krylovii might have different resistance mechanism to drought under low and high nitrogen levels. Low nitrogen condition increased carboxylase activity and photochemical center energy conversion efficiency. High nitrogen instead increased stomata regulation of Stipa krylovii.