Northern hemispheric background concentrations of ozone are increasing, but few studies have assessed the ecological significance of these changes for grasslands of high conservation value under field conditions. We carried out a 3-year field experiment in which ozone was released at a controlled rate over three experimental transects to produce concentration gradients over the field site, an upland mesotrophic grassland located in the UK. We measured individual species biomass in an annual hay cut in plots receiving ambient ozone, and ambient ozone elevated by mean concentrations of approximately 4 ppb and 10 ppb in the growing seasons of 2008 and 2009. There was a significant negative effect of ozone exposure on herb biomass, but not total grass or legume biomass, in 2008 and 2009. Within the herb fraction, ozone exposure significantly decreased the biomass of Ranunculus species and that of the hemi-parasitic species Rhinanthus minor. Multivariate analysis of species composition, taking into account spatial variation in soil conditions and ozone exposure, showed no significant ozone effect on the grass component. In contrast, by 2009, ozone had become the dominant factor influencing species composition within the combined herb and legume component. Our results suggest that elevated ozone concentrations may be a significant barrier to achieving increased species diversity in managed grasslands.