Woody vegetation is distributed patchily in many arid and semi-arid ecosystems, where it is often associated with elevated nitrogen (N) pools and availability in islands of fertility. We measured N availability and δ15N in paired blue-oak versus annual grass dominated patches to characterize the causes and consequences of spatial variation in N dynamics of grassland-savanna in Sequoia-Kings Canyon National Park. We found significantly greater surface soil N pools (0–20 cm) in oak patches compared to adjacent grass areas across a 700 m elevation gradient from foothills to the savanna-forest boundary. N accumulation under oaks was associated with a 0.6‰ depletion in soil δ15N relative to grass patches. Results from a simple δ15N mass balance simulation model, constrained by surface soil N and δ15N measured in the field, suggest that the development of islands of N fertility under oaks can be traced primarily to enhanced N inputs. Net N mineralization and percent nitrification in laboratory incubations were consistently higher under oaks across a range of experimental soil moisture regimes, suggesting a scenario whereby greater N inputs to oak patches result in net N accumulation and enhanced N cycling, with a potential for greater nitrate loss as well. N concentrations of three common herbaceous annual plants were nearly 50% greater under oak than in adjacent grass patches, with community composition shifted towards more N-demanding species under oaks. We find that oaks imprint distinct N-rich islands of fertility that foster local feedback between soil N cycling, plant N uptake, and herbaceous community composition. Such patch-scale differences in N inputs and plant–soil interactions increase biogeochemical heterogeneity in grassland-savanna ecosystems and may shape watershed-level responses to chronic N deposition.