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Questions How does horse or sheep grazing affect species richness, diversity and functional composition of plant communities in sub-Mediterranean grasslands? What are the implications of grazing management for species conservation? Location Pastures dominated by Bromus erectus grazed by either sheep or horses in the Umbria-Marches Apennines (central Italy). Methods We examined grasslands at altitudes ranging from 1000 to 1200,m a.s.l. on north-facing slopes and with a slope angle of 20 - 40°. In 20 plots of 1m2 for each management type, canopy height and above-ground phytomass were recorded. In 120 plots (60 for each management type) of 1m2 the cover value of each species was recorded. Floristic diversity and community similarity of the sheep- and horse-grazed conditions were compared. Functional plant traits and strategies or ecological requirements were also evaluated. Results The sward was shorter and supported less above-ground phytomass in the horse-grazed area. The sheep- and horse-grazed areas had similar floristic diversity. Accidental species were the species most affected. Plants with low-nutrient requirement spread in horse-grazed pasture. Functional traits of species were filtered by the system, resulting in diverse cover values of species. Horse grazing promoted plants with a robust defence strategy (avoidance and tolerance) that ensured leaves were replaced when horses were not grazing, as well as species with clonal growth. In the sheep-grazed area, a higher level of selective defoliation and a delayed start to the grazing period promoted species with low palatability, a late-flowering strategy and those intolerant to trampling by large herbivores (chamaephytes). The value of forage feed was slightly higher in horse-grazed pasture. Grazing of horses was more effective than that of sheep for controlling dominant unpalatable tall grasses. Conclusion In terms of biodiversity conservation, horse grazing may be considered as useful as sheep grazing, but only if managed at optimal stocking rates, because the increase in short grasses and annuals (growth forms with poor root systems) does not ensure maintenance of soil on steep slopes.