Chronic nitrogen (N) fertilization can greatly affect soil carbon (C) sequestration by altering biochemical interactions between plant detritus and soil microbes. In lignin-rich forest soils, chronic N additions tend to increase soil C content partly by decreasing the activity of lignin-degrading enzymes. In cellulose-rich grassland soils it is not clear whether cellulose-degrading enzymes are also inhibited by N additions and what consequences this might have on changes in soil C content. Here we address whether chronic N fertilization has affected (1) the C content of light versus heavier soil fractions, and (2) the activity of four extracellular enzymes including the C-acquiring enzyme β-1,4-glucosidase (BG; necessary for cellulose hydrolysis). We found that 19 years of chronic N-only addition to permanent grassland have significantly increased soil C sequestration in heavy but not in light soil density fractions, and this C accrual was associated with a significant increase (and not decrease) of BG activity. Chronic N fertilization may increase BG activity because greater N availability reduces root C:N ratios thus increasing microbial demand for C, which is met by C inputs from enhanced root C pools in N-only fertilized soils. However, BG activity and total root mass strongly decreased in high pH soils under the application of lime (i.e. CaCO3), which reduced the ability of these organo-mineral soils to gain more C per units of N added. Our study is the first to show a potential ‘enzyme link’ between (1) long-term additions of inorganic N to grassland soils, and (2) the greater C content of organo-mineral soil fractions. Our new hypothesis is that the ‘enzyme link’ occurs because (a) BG activity is stimulated by increased microbial C demand relative to N under chronic fertilization, and (b) increased BG activity causes more C from roots and from microbial metabolites to accumulate and stabilize into organo-mineral C fractions. We suggest that any combination of management practices that can influence the BG ‘enzyme link’ will have far reaching implications for long-term C sequestration in grassland soils.