The incorporation of alfalfa into grass systems reduces reliance on nitrogen fertilizer application. Over two consecutive years, we investigated the regulation of carbon and nitrogen metabolism in grasses and productivity enhancement under four nitrogen application rates (0, 105, 210, and 315 kgha-1) and five alfalfa incorporation levels (0%, 10%, 20%, 30%, and 40%); incorporation (%) refers strictly to seeding proportion (% of the monoculture seeding rate). Within the range of 20-30% alfalfa incorporation and 105-210 kgha-1 nitrogen application, key physiological and biochemical parameters, except the net photosynthetic rate (Pn), reached their peak values compared to the N0A0 (no nitrogen and no alfalfa) treatment. Transpiration rate (Tr), intercellular CO2 concentration (Ci), and stomatal conductance (Gs) increased by 43.64%, 40%, and 48.09%, respectively. Pn peaked under the N2A0 treatment (210 kgha-1 nitrogen application and no alfalfa), increased by 65.63%. Nitrate reductase (NR), glutamine synthetase (GS), and ribulose-1,5-bisphosphate carboxylase (RuBisCO) activity increased by 154.60%, 112.39%, and 199.19%, respectively. Total sugar (TS) and protein production (YCP) increased by 122.22% and 145.17%, respectively. The entropy-weighted TOPSIS evaluation based on multi-objective assessment showed that the combination of 20% alfalfa incorporation with 105 kg Nha-1 application is an efficient model for enhancing forage productivity in the Horqin Sandy Land.