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Plant species may acquire different forms of nitrogen (N) to reduce competition for the same resource, but how plants respond to neighbors with different densities in their N uptake is still poorly understood. We investigated the effects of competition regime on the uptake of different N forms by two hygrophytes, Carex thunbergii and Polygonum criopolitanum, by conducting a hydroponic test of excised roots and an in situ experiment in a subtropical wetland ecosystem. The two species were grown either in monocultures or mixtures with various neighbor densities. Root functional traits and N uptake rates of different N forms were measured. Our results showed that N uptake was mainly determined by N form, rather than species identity. Both species were able to use organic N sources, but they took up relatively more N supplied as NO−3 than as NH+4 or glycine, irrespective of competition treatments. Both species preferred NO−3 when grown in monoculture, but in the presence of competitors, the preference of fast-growing C. thunbergii persisted while P. criopolitanum acquired more NH+4 and glycine, with stronger responses being observed at the highest neighbor density. The hydroponic test suggested that these divergences in N acquisition between two species might be partially explained by different root functional traits. To be specific, N uptake rates were significantly positively correlated with root N concentration and specific root length, but negatively correlated with root dry matter content. Our results implicated that C. thunbergii has a competitive advantage with relatively more stable N acquisition strategy despite a lower N recovery than P. criopolitanum, whereas P. criopolitanum could avoid competition with C. thunbergii via a better access to organic N sources, partly mediated by competition regimes.