The stress-gradient-hypothesis predicts that interactions among organisms shift from competition to facilitation as environmental stress increases. Whether the strength of mutualism will increase among symbiotically associated organisms when partners are forced into resource limitation remains unknown. Plants exchange photosynthetic carbohydrates (plant C) for nutrients in mycorrhizal symbiosis but how this exchange varies with plant C limitation is not fully understood. We investigated the influence of plant C availability and of arbuscular mycorrhizal fungi (AMF) on plant nitrogen (N) uptake and resource allocation using 13C and 15N labeling. We grew Plantago lanceolata with and without AMF Rhizophagus irregularis under ambient (400 ppm, AC) and low (100 ppm, LC) atmospheric [CO2] and physically restricted plant root but not mycorrhizal access to soil N. We found that plants grown under LC used AMF to obtain the same amount of N as those grown under AC, but the amount of newly fixed C correlated with the acquisition of N only under LC. The LC plants allocated more of their C to aboveground tissues. Overall our results suggest a more beneficial role of symbiosis under C limitation. The tight reciprocal control on N transfer and C allocation under C limited conditions supports the stress-gradient hypothesis of mutualistic symbiotic functioning.