Summary Controlled experiments at the level of individual plants show that legume species use different strategies for the regulation of symbiotic dinitrogen fixation in response to nitrogen availability. These strategies were suggested to improve legume fitness in the context of the plant community, although rarely studied at this level. We evaluated how nitrogen availability and conspecific vs heterospecific interactions influenced the strategy of regulation of nitrogen fixation. We grew two species of herbaceous legumes representing two different strategies of regulation without interaction, under treatments of deficient and sufficient nitrogen availability, with conspecific or heterospecific interaction. We found that Hymenocarpus circinnatus maintained a facultative strategy of downregulating nitrogen fixation when nitrogen was available under both con‐ and heterospecific interactions, as was also found for this species when grown alone. Vicia palaestina also downregulated nitrogen fixation under both con‐ and heterospecific interactions but did not regulate fixation when grown alone. Our results showed that under nitrogen limitation, interaction with a neighboring plant reduced fitness, reflecting a competitive effect. Our findings suggest that when interacting with other plants, downregulation of nitrogen fixation is more likely, therefore reducing the energetic cost of fixation, and improving plant performance in competitive ecological communities, especially when nitrogen is available.