Exudation of nitrogenous compounds from the roots of dinitrogen-fixing plants is a potential source of nitrogen for adjacent plants in intercropping systems. We studied (1) the extent of N exudation from the roots of a tropical legume tree Gliricidia sepium (Jacq.) Kunth ex Walp., and (2) the ability of a C4 fodder grass Dichantium aristatum (Poir) C.E. Hubbard and its mycorrhizal symbionts to absorb N from tree exudates in a glasshouse experiment. Root exudates of 15N-labelled trees were collected in hydroponic culture and applied with irrigation water on grass grown in separate pots. During the 10-week experiment, the trees exuded 34.1 ± 5.0 mg of N, which represented 1.7 ± 0.2% of their total N by the end of the experiment. The total amount exuded would have been enough to supply 16% of grass N content by the end of the experiment. The grass, however, absorbed only 3.8–7.5% of 15N in exudates and gained 0.8–1.1% of its N from exudates. The low absorption of exudate N by grass was explained by probable soil microbial immobilisation and by the dilution of exuded N in the substantially larger pool of soil mineral N. A close contact between the root systems of N donor and recipient plants directly or via their mycorrhizal symbionts seems to be a precondition of the apparently direct N transfer earlier observed in field studies of the same soil-plant system.