Evidence from field studies suggests that some plant species enhance their persistence by reinforcing patterns of N availability through differences in litter quality. Using mathematical models of nutrient flow, we explore whether and how recycling affects plant growth, competition, and coexistence and whether it leads to positive feedbacks. Two mechanisms are considered: the ability of plants to access two forms of soil N, complex (e.g., organic) and simple (e.g., nitrate), and the effect of density‐dependent limitation of growth. Except in the trivial case of limitation by N in one form without density dependence, differences in litter quality can prevent the establishment of competitors. Feedback can, conversely, facilitate the invasion of competitors. At equilibrium, the rate of decomposition does not affect the outcome of competition. Species affect their long‐term persistence if they alter the fraction of nitrogen that is returned to the soil and becomes available for plant uptake. Increasing the fraction of N that is recycled favors specialists in complex nitrogen and species that suppress the growth of others at high nitrogen availability. Increasing the rate of microbial decomposition of complex nitrogen favors specialists in simple nitrogen.