Compost amendments to grasslands have been proposed as a strategy to mitigate climate change through carbon (C) sequestration, yet little research exists exploring the net mitigation potential or the long‐term impacts of this strategy. We used field data and the DAYCENT biogeochemical model to investigate the climate change mitigation potential of compost amendments to grasslands in California, USA. The model was used to test ecosystem C and greenhouse gas responses to a range of compost qualities (carbon to nitrogen [C:N] ratios of 11.1, 20, or 30) and application rates (single addition of 14 Mg C/ha or 10 annual additions of 1.4 Mg C·ha−1·yr−1). The model was parameterized using site‐specific weather, vegetation, and edaphic characteristics and was validated by comparing simulated soil C, nitrous oxide (N2O), methane (CH4), and carbon dioxide (CO2) fluxes, and net primary production (NPP) with three years of field data. All compost amendment scenarios led to net greenhouse gas sinks that persisted for several decades. Rates of climate change mitigation potential ranged from 130 ± 3 g to 158 ± 8 g CO2‐eq·m−2·yr−1 (where “eq” stands for “equivalents”) when assessed over a 10‐year time period and 63 ± 2 g to 84 ± 10 g CO2‐eq·m−2·yr−1 over a 30‐year time period. Both C storage and greenhouse gas emissions increased rapidly following amendments. Compost amendments with lower C:N led to higher C sequestration rates over time. However, these soils also experienced greater N2O fluxes. Multiple smaller compost additions resulted in similar cumulative C sequestration rates, albeit with a time lag, and lower cumulative N2O emissions. These results identify a trade‐off between maximizing C sequestration and minimizing N2O emissions following amendments, and suggest that compost additions to grassland soils can have a long‐term impact on C and greenhouse gas dynamics that contributes to climate change mitigation.