Litter decay rates often correlate with the initial ratios of lignin:nitrogen (N) or lignin:cellulose in litter. However, the chemical and microbial mechanisms that give rise to these patterns are still unclear. To identify these mechanisms, we studied the decomposition of a model plant system, Arabidopsis thaliana, in which plants were manipulated to have low levels of lignin, cellulose, or litter N. Nitrogen fertilizer often increases the loss of cellulose, but it suppresses the breakdown of lignin in plant litter. To understand the mechanisms driving these patterns, we decomposed plants in litterbags for one year in control and N-fertilized plots in an Alaskan boreal forest. We found that litter N had a positive effect on total mass loss because it increased the loss of lignin, N, and soluble C. Lignin had a negative effect on rates of total litter mass loss due to decreases in the loss of cellulose and hemicellulose. Cellulose had a positive effect on lignin loss, supporting the concept of a "priming effect" for lignin breakdown. However, the low-cellulose plants also lost more of their original cellulose compared to the other plant types, indicating that decomposers mined the litter for cellulose despite the presence of lignin. Low-lignin litter had higher fungal biomass and N-acetyl glucosaminidase (NAG, a chitinase) activity, suggesting that lignin restricted fungal growth and may have influenced competitive interactions between decomposers. Nitrogen fertilization increased NAG activity in the early stages of decay. In the later stages, N fertilization led to increased cellulase activity on the litters and tended to reduce lignin losses. The transition over time from competition among decomposers to high cellulase activity and suppressed lignin loss under N fertilization suggests that, in N-limited systems, N fertilization may alter decomposer community structure by favoring a shift toward cellulose- and mineral-N users.