AbstractIn many systems, native communities are being replaced by novel exotic‐dominated ones. We experimentally compared species diversity decline between nine‐species grassland communities under field conditions to test whether diversity maintenance mechanisms differed between communities containing all exotic or all native species using a pool of 40 species. Aboveground biomass was greater in exotic than native plots, and this difference was larger in mixtures than in monocultures. Species diversity declined more in exotic than native communities and declines were explained by different mechanisms. In exotic communities, overyielding species had high biomass in monoculture and diversity declined linearly as this selection effect increased. In native communities, however, overyielding species had low biomass in monoculture and there was no relationship between the selection effect and diversity decline. This suggests that, for this system, yielding behaviour is fundamentally different between presumably co‐evolved natives and coevolutionarily naive exotic species, and that native‐exotic status is important to consider.