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Abstract Oak woodlands are biodiversity hotspots that provide critical ecosystem services and hold significant cultural value. However, these ecosystems are increasingly threatened by invasive grasses, which suppress native plant diversity, elevate fire risk and disrupt ecosystem processes. While targeted grazing is gaining popularity as a management technique for controlling invasives, the ecological impacts of dry‐season grazing are understudied, as are outcomes for native species. We evaluated the effectiveness of targeted summer grazing with sheep and goats for reducing invasive grass fuel loads and enhancing plant diversity in oak woodlands of California by comparing plant species richness and abundance in paired grazed and ungrazed plots over multiple years. Grazing substantially increased richness and cover of native forbs. Non‐native cover was unaffected, though minor increases in non‐native forb numbers were observed. Ordination analysis revealed that grazing shifted plant community composition, largely driven by increases in native forb species and to a lesser extent non‐native forbs. Indicator species analysis revealed similar patterns, with increases in multiple forb species detected with grazing, highlighting the potential for grazing to support a diversity of plant species. These benefits likely stem from reduced thatch accumulation, improved light availability and the creation of favourable microsites for seedling establishment. Practical implications . Dry‐season grazing with goats and sheep presents a multi‐benefit strategy for land stewardship, helping to reduce invasive grass thatch, enhance native plant diversity and lower fire risk in invaded woodlands. While grazing alone is unlikely to effectively suppress invasive grasses and may encourage certain non‐native forbs, it can dramatically improve the ability of native species to coexist with non‐natives. To maximize benefits, practitioners should integrate grazing with complementary management strategies when controlling non‐native plants is a priority. Careful management of grazing intensity, timing and duration, coupled with long‐term monitoring, will aid in balancing these ecological trade‐offs. Incorporating targeted dry‐season grazing into a broader restoration framework could aid in the conservation of biodiversity in grass‐invaded dryland ecosystems worldwide.