Drought events can strongly affect ecosystem functioning by modifying relationship between plants, microbes and soil chemistry, with consequent impacts on nutrient cycling. However, the potential impacts of a soil moisture reduction on the nitrogen (N) and phosphorus (P) cycling in grasslands remain poorly understood, especially in regard to forage production. To fill this knowledge gap, a drought experiment was carried out using rainout shelters in two permanent grasslands, characterized by similar vegetation communities but contrasted soil nutrient limitations. Drought treatments were applied during two months, either when plant growth was highest (Early-season drought) or after the peak of biomass production (Late-season drought). Dry matter production, forage N status (NNI) and P content as well as N and P contents in microbial biomass and soil were determined. Both early and late-season drought significantly reduced soil moisture during the vegetation growth period. Forage yield was also reduced by drought, but only when it occurred late in the season. Using a structural equation model, we showed that soil moisture reduction had a direct effect on forage N status, suggesting that water shortage induced lower transpiration and water fluxes. Soil moisture reduction also affected forage P by reducing the availability of soil P. However, other mechanisms played a larger role and were site-specific. At the more fertile site, reduction in soil moisture directly impaired forage P, suggesting that water stress mainly resulted in lower diffusion rates to roots, while at the less fertile site, an indirect reduction of forage P through a pathway implying microbes (decrease in microbial P) was detected. Our results suggest that the two grasslands suffered mainly from water shortage per se, but also from droughtinduced nutrient deficiency (mainly P), which amplified yield losses and further decreased forage quality. Overall, our findings emphasize the need for further research on the plant-soil-microbe system functioning, in order to secure a sustainable and resilient forage production in the context of climate change.