Permanent grasslands cover one third of the European agricultural area and are known to store large amounts of carbon (C) in their soils. However, long-term assessments of their C sink strength are still scarce. Thus, we investigated the C budget of an intensively managed, permanent grassland in Switzerland over 16 years, compared the results to changes in soil C stocks, and determined the most important drivers of the net ecosystem CO2 exchange (NEE). Combining NEE fluxes with C imports and C exports, we quantified the grassland C budget, i.e., net biome production (NBP). We observed a large inter-annual variation in NBP, with 9 of the 16 years indicating a C sink, and 7 years indicating a C source. On average, the grassland was a small C sink to C neutral, with a NBP of -70±106 g C m−2 yr−1 (mean±95% confidence interval). Mean NEE fluxes were -284±115 g C m−2 yr−1, C exports via harvest 335±73 g C m−2 yr−1, and organic C imports via slurry -121±43 g C m−2 yr−1. Soil C stocks from 0 to 0.7 m did not change significantly (decrease of 27.5 g C m−2 yr−1 over 13 years). Inter-annual variation in NBP was affected by management practices and environmental conditions. In the last five years, NBP was positive (C source), most likely due to decreasing C imports in combination with extreme weather conditions. Our study demonstrated the importance of covering multiple years with different management events when assessing the C sink strength of a site. Maintaining even a small grassland C sink in the future will be challenging and will require continuous organic C imports.