The restoration of degraded arable land to species-rich and functional grasslands by sowing native species has been tested successfully, while studies on restoration considering land use interest and climate change challenges are underrepresented. In this five-year study, we focused on the process of restoring grassland biodiversity and biomass production under different fertilizer levels in the face of several years of under-averaged precipitation. In 2017, we sowed a species and forb-rich native seed mixture to establish a submontane Arrhenatherion grassland. We applied fertilizer treatments (0, 60, 120 kg N ha-1 y-1, combined with and without P and K fertilizing) in order to meet local farmers' demands on biomass for hay production with nature conservation goals that aim to promote a highly species-rich and functional grassland community. Our results show that sowing a high-diverse and forbs-rich mixture not only leads to a high species richness, but also to usable aboveground biomass production for animal feeding, even with below-average precipitation. However, the slight decline in species number and cover of sown forbs following the dry period in the first year after sowing indicates the sensitivity of less drought-resistant forbs. Due to the priority effects of sown species, no undesirable species have invaded the sward. The nitrogen treatments shifted the grass-forb ratio, with grasses dominating in the nitrogen enrichment treatments due to their increased competition ability, while forbs dominating in the non-nitrogen enrichment treatments. Biomass production was higher at the first cut than at the second, and non-nitrogen fertilized treatments had a lower biomass production compared to nitrogen fertilized treatments. Both grasses and forbs contributed to drought resilience related to biomass production, but forbs contributed relatively more in the first cut under moderate or no nitrogen fertilization and in the second cut only without nitrogen application. Biomass production was strongly determined by year, and thus precipitation. Under drought conditions, species-rich stands produced sufficient biomass even without nitrogen fertilization. In order to establish and maintain species and forb-rich grasslands on ex-arable land, nitrogen fertilization should be moderate at most. Six of the 44 sown species, namely Arrhenatherum elatius, Alopecurus pratensis, Dactylis glomerata, Poa pratensis, Centaurea jacea, and Trifolium pratense, contributed significantly to the biomass and could act as matrix species in climate-adapted high-diverse native seed mixtures for our study region.