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Moderate grazing intensity is considered the basic requirement to enhance ecosystem function in grasslands. Yet, deterioration by overgrazing is common in many biomes, including Campos grasslands in South America. Understanding how grazing management can lead to recovery of ecosystem function is essential to design and implement effective strategies for sustainable use of this resource. In a long‐term field experiment carried out in Southern Brazil, we studied the effects of temporal grazing exclusions (spring or fall) at moderate and severe livestock grazing intensities (maintained by adjusting contrasting forage allowances) on the species richness, botanical composition, forage mass, sward height, and photosynthetic active radiation intercepted. The experiment was arranged in a completely randomized design with three replications of grazing exclusions, applied simultaneously at moderate and severe grazing intensities. Moderate grazing intensity showed a bimodal structure of shorter and taller canopies, and high species richness. Severe grazing created a shorter and homogeneous sward structure characterized by less standing biomass and species loss. In response to grazing exclusions, sward height, standing biomass, and light interception recovered almost to the levels of moderate grazing. Further, within 2 years grass species richness increased and botanical composition changed toward grasses with erect habit prevailing in moderate grazing intensity. Our study confirms that (1) moderate grazing intensities allow the coexistence of high number of species and (2) spring grazing exclusions of long‐term overgrazed grasslands can lead to a quick start to recover the grass species richness, primary productivity, and species composition like that prevailing in well‐managed grasslands. [ABSTRACT FROM AUTHOR]