1. In Europe, grassland agriculture is one of the dominant land uses. A major aim of European agri-environment policy is the management of grassland for botanical diversity conservation and restoration, together with the delivery of ecosystem services including soil carbon (C) sequestration. 2. To test whether management for biodiversity restoration has additional benefits for soil C sequestration, we investigated C and nitrogen (N) accumulation rates in soil and C and N pools in vegetation in a long-term field experiment (16years) in which fertilizer application and plant seeding were manipulated. In addition, the abundance of the legume Trifolium pratense was manipulated for the last 2years. To unravel the mechanisms underlying changes in soil C and N pools, we also tested for effects of diversity restoration management on soil structure, ecosystem respiration and soil enzyme activities. 3. We show that the long-term biodiversity restoration practices increased soil C and N storage especially when these treatments were combined with the recent promotion of the legume Trifolium pratense, sequestering 317g C and 35g N m-2year-1 in the most successful management treatment. These high rates of C and N accumulation were associated with reduced ecosystem respiration, increased soil organic matter content and improved soil structure. Cessation of fertilizer use, however, reduced the amount of C and N contained in vegetation. 4. Synthesis and applications. Our findings show that long-term diversity restoration practices can yield significant benefits for soil C storage when they are combined with increased abundance of a single, sub-ordinate legume species. Moreover, we show that these management practices deliver additional ecosystem benefits such as N storage in soil and improved soil structure. © 2010 The Authors. Journal of Applied Ecology © 2010 British Ecological Society.