We have explored species-specific preferences for nitrate (NO3(-)) and ammonium (NH4(+)) as an alternative niche separation in ecosystems where nitrogen (N) is present mostly in inorganic forms. The Patagonian steppe is dominated by shrubs and grasses. Shrubs absorb water and nutrients from deep soil layers, which are poor in N, while grasses have the opposite pattern, absorbing most of their water and nutrients from the upper layers of the soil. We hypothesized that the preferences of shrub and grass for inorganic N forms are different and that the rate of potential N uptake is greater in shrubs than in grasses. To test this hypothesis, we grew individuals of six dominant species in solutions of different NH4(+):NO3(-) concentration ratios. Nitrate uptake was found to be higher in shrubs, while ammonium uptake was similar between plant functional types. The NH4(+):NO3(-) uptake ratio was significantly lower for shrubs than grasses. Shrubs, which under field conditions have deeper rooting systems than grasses, showed a higher N absorption capacity than grasses and a preference for the more mobile N form, nitrate. Grasses, which had lower N uptake rates than shrubs, preferred ammonium over nitrate. These complementary patterns between grasses and shrubs suggest a more thorough exploitation of resources by diverse ecosystems than those dominated by just one functional type. The loss of one plant functional group or a significant change in its abundance would therefore represent a reduction in resource use efficiency and ecosystem functioning.