Plant functional traits can reflect the response and adaptation of plant species to environmental changes. However, how plant functional traits of dominant species respond to the fencing, water and nitrogen additions in a sandy grassland ecosystem is still unclear. Here, a manipulative field experiment was conducted to investigate the effects of fencing, water and nitrogen addition on the functional traits of four dominant species (Pennisetum centrasiaticum, Cleistogenes squarrosa, Chenopodium acuminatum and Salsola collina) in Horqin sandy grassland. The results showed that nitrogen addition had a significant effect on plant height, specific leaf area (SLA), leaf nitrogen content (LNC), and leaf dry matter content (LDMC). Nitrogen addition increased plant height for C. squarrosa as well as SLA for P. centrasiaticum and S. collina, while reducing plant height for P. centrasiaticum and LDMC for S. collina. Also, nitrogen addition increased LNC for the four dominant species. Water addition reduced LDMC in grazing treatment, as well as plant height in fencing and nitrogen addition treatments. Compared to control treatment, nitrogen addition increased the strength of negative associations of LDMC with plant height and LNC. The results suggest that nitrogen addition plays an important role in determining the growth of the four dominant species, and water addition increases the competition of resource use among species in fencing and nitrogen addition treatments. Plants in sandy grassland can mediate the key functional traits to cope with alterations of water and nitrogen under the future global change scenarios.