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Sulphur (S) and nitrogen (N) deposition are important drivers of the terrestrial carbon (C) and N cycling. We analyzed changes in C and N pools in soil and tree biomass at a highly acidified spruce site in the Czech Republic during a 15 year period. Total S deposition decreased from 5 to 1.1 g m−2 yr−1 between 1995 and 2009, whereas bulk N deposition did not change. Over the same period, C and N pools in the Oa horizon declined by 116 g C and 4.2 g N m−2 yr−1, a total decrease of 47% and 42%, respectively. This loss of C and N probably originated from organic matter (OM) that had accumulated during the period of high acid deposition when litter decomposition was suppressed. The loss of OM from the Oa horizon coincided with a substantial leaching (1.3 g N m−2 yr−1 at 90 cm) in the 1990s to almost no leaching (<0.02 g N m−2 yr−1) since 2006. Forest floor net N mineralization also decreased. This had consequences for spruce needle N concentration (from 17.1 to 11.4 mg kg−1 in current needles), an increase in litterfall C/N ratio (from 51 to 63), and a significant increase in the Oi + Oe horizon C/N ratio (from 23.4 to 27.3) between 1994 and 2009/2010. Higher forest growth and lower canopy defoliation was observed in the 2000s compared to the 1990s. Our results demonstrate that reducing S deposition has had a profound impact on forest organic matter cycling, leading to a reversal of historic ecosystem N enrichment, cessation of nitrate leaching, and a major loss of accumulated organic soil C and N stocks. These results have major implications for our understanding of the controls on both N saturation and C sequestration in forests, and other ecosystems, subjected to current or historic S deposition.