Aims Litter decomposition is a key process of energy flow and nutrient cycling in terrestrial ecosystems that might be sensitive to the loss of biodiversity. Our objective in this study was to investigate the potential effects of plant litter diversity on decomposition processes and nutrient release in an Inner Mongolia grassland ecosystem. Methods We placed aboveground litter (stems and leaves) of four dominant species (Stipa krylovii, Astragalus scaberrimus, Potentilla acaulis and Leymus chinensis) individually and in mixture in litterbags in the field on October 27, 2006. We collected the litter bags after 0, 162, 252 and 341 days and determined mass loss and N and P content in the remaining litter. Important findings After 341 days, the remaining mass of litter of individual species was significantly negatively correlated with initial litter N content. There was no significant difference between the observed and expected mass remaining for most litter mixtures, except the A. scaberrimus - P. acaulis mixture, in which mass remaining was 7.5% higher than the expected. Nevertheless, most litter mixtures affected the dynamics of N and P during decomposition. N releases of S. krylovii - A. scaberrimus and S. krylovii - L. chinensis were facilitated in the early stages of decomposition, in which remaining N was 4.7% and 10.0% lower, respectively, than the expected. Meanwhile, either release or accumulation of P in four of five litter mixtures was also promoted in different decomposition stages, and the P remaining significantly differed from the expected in S. krylovii - P. acaulis, S. krylovii - L. chinensis and S. krylovii - A. scaberrimus (31.1%, 23.1% and 21.8%, respectively in the early, middle, and later stage of decomposition). Our results show that litter diversity has significant effects on nutrient dynamics, especially for P, but not on mass loss rates of most decomposing mixtures, and the effects of mixing are complex.