Recent evidence indicates that grassland community structure and species diversity are influenced by genetic variation within species. We review what is known regarding the impact of intraspecific diversity on grassland community structure, using an ancient limestone pasture as a focal example. Two genotype-dependent effects appear to modify community structure in this system. First, the abundance of individual constituent species can depend upon the combined influence of direct genetic effects stemming from individuals within the population. Second, the outcome of localized interspecific interactions occurring within the community can depend on the genotypes of participating individuals (indicating indirect genetic effects). Only genotypic interactions are thought to be capable of allowing the long-term coexistence of both genotypes and species. We discuss the implications of these effects for the maintenance of diversity in grasslands. Next, we present new observations indicating that losses of genotypic diversity from each of two species can be predicted by the abundance of other coexisting species within experimental grassland communities. These results suggest genotype-specific responses to abundance in other coexisting species. We conclude that both direct and indirect genetic effects are likely to shape community structure and species coexistence in grasslands, implying tight linkage between fine-scale genetic and community structure.