Questions Does the absence of equalizing mechanisms after cessation of grazing unleash strong above-ground competitors to create large patches in the community? Do these competitive intraspecific aggregations displace and exclude other species, thereby reducing species diversity? Location Atlantic grasslands, Aralar Natural Park, Basque Country, Northern Iberian Peninsula. Methods Large herbivores were experimentally excluded from three sites (50 m × 50 m exclusion fences) during 9 yr in a productive semi-natural grassland system with a long history of grazing, using adjacent grazed plots as experimental controls. Sampling was carried out by systematically placing 100 quadrats (0.5 m × 0.5 m) in each of the six plots. Floristic composition and abundance, as well as eight hydrological and chemical soil properties, were measured in each quadrat. The spatial structures created by competitive species were analysed using RDA in conjunction with Moran’s eigenvector maps, and soil variables were simultaneously included in the analyses, thus disentangling the structures likely created by niche effects. Competitive exclusion was further determined using linear regressions between species richness and abundance of competitive species. Results Grazing exclusion unleashed competitive species such as Festuca microphylla and Agrostis capillaris, which became dominant in the exclusion plots and created large spatial patches. Furthermore, a negative linear relationship, consistent across exclusion plots, was observed between species richness and abundance of competitive species, indicating that strong above-ground competitors outcompeted other species when herbivores were excluded. However, the outcome of grazing exclusion across sites depended to some extent on local environmental conditions (niche effects). Conclusions This work confirms that the powerful equalizing mechanism of disturbance by herbivores is crucial for species co-existence in productive grasslands. However, important differences observed in environmental effects across sites suggest that, even in highly productive grasslands, plant traits and local environmental characteristics (niche effects) do matter for species co-existence.