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In their state-and-transition model (STM) for the Mountain Loam (now Deep Clay Loam) ecological site in northwest Colorado, Kachergis et al. (2012) propose the existence of alternate stable states in the mountain sagebrush steppe separated by functional thresholds. The model includes a transition from mountain big sagebrush shrubland with a diverse understory (“Diverse”), to heavy mountain big sagebrush shrubland associated with sparse understory (“Dense”) in the absence of shrub management and fire for more than 60 years. While the loss of herbaceous understory would tend to reduce vulnerability to fire and reinforce shrub dominance on Dense states, this cycle does not provide a mechanism that would explain the switch from negative feedbacks that maintain a Diverse understory, to positive feedbacks driving understory loss and favoring shrub dominance in Dense. Identification of the ecological processes involved in such a switch would provide evidence for the existence of functional thresholds in this system and provide key information for potential restoration pathways. We hypothesize that the loss of herbaceous understory in the transition from Diverse to Dense states can be attributed to a shift from fast to slow N-cycling rates as relatively recalcitrant sagebrush litter comprises an increasingly greater proportion of the litter pool over time. To test this hypothesis, we measured N mineralization rates in both states through a series of in situ soil incubations over the 2014 growing season. We also compared the relative contributions of herbaceous and sagebrush litter to litter pools in each states. Results of these analyses and discussion of implications for modeling and management will be presented.