In perennial grasslands, the below-ground population of meristems (bud bank) plays a fundamental role in plant population dynamics. Here, we tested the 'meristem limitation hypothesis' prediction - that bud banks increase along an increasing precipitation/productivity gradient in North American grasslands - and assessed the seasonal dynamics of bud banks. We sampled bud and stem populations quarterly at six sites across a 1100 km gradient in central North America. Bud banks increased with average annual precipitation, which explained 80% of the variability between the sites. In addition, seasonal changes in grass bud banks were surprisingly similar across a 2.5-fold range in precipitation and a 4-fold range of productivity: densities peaked in March, decreased in June and increased slightly in September. Increasing meristem limitation may constrain vegetation responses to inter-annual changes in resources. An important consequence of this is that biomes with large bud banks may be the most responsive to environmental change. If meristem limitation represents an important constraint on productivity responses to environmental variability, then bud banks must be considered in developing predictive models for grassland responses to environmental change.