Plant response to water deficit when grown in a mixed-culture may differ markedly from that observed when the same plant is studied individually or in a monoculture. This study was conducted to determine the combined effects of soil water deficit and above and below ground plant competition on 14C assimilate partitioning in the plant-soil system of white clover and rye-grass. Plants were grown: (1) individually; (2) in shoot competition); or (3) in shoot+root competition and either well-watered (0.0 MPa) or at a moderate (−0.5 MPa) soil water deficit in specially designed crates and pulse-labelled in an assimilation chamber with 14CO 2. At a moderate soil water deficit in the shoot+root competition treatment compared to the shoot competition treatment: (1) a significant increase was observed in the shoot dry matter yields of both white clover (1.80 vs. 1.47 g plant −1) and rye-grass (4.96 vs. 2.71 g plant −1); (2) one-third more radioactive 14C was recovered in the plant-soil system (704 vs. 528 kBq); and (3) a three times higher percent of net assimilated radioactive 14C was recovered in the soil compartment. At a moderate soil water deficit one-fourth (24.7%) of the total radioactive 14C in the plant-soil system of white clover and ryegrass plants grown in the shoot+root competition was recovered in the soil compartment. Increased total N recovered in harvested tissue of both white clover and ryegrass plants grown in shoot+root competition at a moderate soil water deficit indicated that N uptake by plants increased due to either: (1) increases in white clover atmospheric N fixation (due to the removal of soil N by the ryegrass root system in direct contact with the white clover root system which stimulated atmospheric N fixation by white clover); or (2) the indirect effects of elevated soil C on mineralization processes (due to stimulation of soil microbia).