Forest trees are able to thrive in nutrient poor soils in part because they obtain growth-limiting nutrients, especially nitrogen (N), through mutualistic symbiosis with ectomycorrhizal (ECM) fungi. Addition of inorganic N into these soils is known to disrupt this mutualism and reduce the diversity of ECM fungi. Despite its ecological impact, the mechanisms governing the observed effects of elevated inorganic N on mycorrhizal communities remain unknown. We address this by using a compartmentalized in vitro system to independently alter nutrients to each symbiont. Using stable isotopes, we traced the nutrient flux under different nutrient regimes between Eucalyptus grandis and its ectomycorrhizal symbiont, Pisolithus albus. We demonstrate that giving E. grandis independent access to N causes a significant reduction in root colonization by P. albus. Transcriptional analysis suggests that the observed reduction in colonization may be caused, in part, by altered transcription of microbe perception genes and defence genes. We show that delivery of N to host leaves is not increased by host nutrient deficiency but by fungal nutrient availability. Overall, this advances our understanding of the effects of N fertilization on ECM fungi and the factors governing nutrient transfer in the E. grandis – P. microcarpus interaction.