Summary Biodiversity conservation of grasslands in the face of transformation and global climate change will depend mainly on rangelands because of insufficient conservation areas in regions suited to agriculture. Transformed vegetation (pastures, crops and plantations) is not expected to conserve much biodiversity. This study examined the impact of land use on the plant diversity and community composition of the southern Drakensberg grasslands in South Africa, which are threatened with complete transformation to pastures, crops and plantations. The main land uses in this high rainfall region are: ranching or dairy production under private tenure using indigenous grassland, pastures (Eragrostis curvula, kikuyu and ryegrass) and maize; plantation forestry; communal tenure (maize and rangelands); and conservation. Plant diversity and composition were assessed using Whittaker plots. Transformed cover types were depauperate in species and ranged from kikuyu (1·4 species m−2) and ryegrass (2·9), to pine plantation (3·1), E. curvula pasture (3·1), commercial maize (3·2) and communal maize (7·8). With the exception of pine plantations, these communities supported mostly exotic (50 of 70 species) or ruderal indigenous species and made little contribution to plant species conservation. Abandoned communal cropland reverted to an indigenous grassland almost devoid of exotic species within c. 20 years. It was predicted that frequently cultivated sites (maize and ryegrass) would support less diversity than long‐lived pastures (kikuyu and E. curvula). This was contradicted by the relatively high species diversity of communal maize fields, which was attributed to a lack of herbicides, and the depauperate communities of kikuyu and of E. curvula pasture, which were attributed, respectively, to a dense growth form and a severe mowing regime. Pine plantations harboured fourfold more indigenous species per plot (27) than other transformed types. Species were mostly shade‐tolerant grassland relics that had persisted for 12 years since planting, and some forest colonizers. Indigenous species were unlikely to be maintained because of aggressive invasion by the exotic Rubus cuneifolius and severe disturbance associated with tree harvest and replanting. The richness of indigenous grasslands was expected to differ in response to grazing pressure but they differed only in composition. Grasslands were dominated by grasses, despite the richness of herbaceous species. The dominance of Themeda triandra was reduced under livestock grazing in favour of more grazing‐tolerant species. Exotic species were inconspicuous except for the dicotyledon Richardia brasiliensis, a subdominant under communal grazing. Southern Drakensberg grasslands are probably now stocked with livestock six‐ to 35‐fold higher than during pre‐settlement times. A grassland protected for c. 50 years supported twofold greater richness (101 species plot−1) than grazed grasslands, suggesting that a 150‐year history of increased mammalian grazing had already reduced plant diversity. Synthesis and applications. Land acquisition is costly, thus conservation of plant diversity in the southern Drakensberg requires a policy that inhibits transformation of rangelands. This can be achieved by enhancing their economic viability without changing the vegetation composition. Their inherent value must be recognized, such as for water production. The viability of commercial ranches can be improved by increasing their size. Conservation efforts need to be focused on plant taxa that only occur on unprotected rangelands.