In diverse plant communities the relative contribution of species to community biomass may change considerably in response to elevated CO2. Along with species-specific biomass responses, reproduction is likely to change as well with increasing CO2 and might further accelerate shifts in species composition. Here, we ask if, after 5 years of CO2 exposure, seed production and seed quality in natural nutrient-poor calcareous grassland are affected by elevated CO2 (650 μL L−1 vs 360 μL L−1) and how this might affect long-term community dynamics. The effect of elevated CO2 on the number of flowering shoots (+ 24%, P < 0.01) and seeds (+ 29%, P = 0.06) at the community level was similar to above ground biomass responses in this year, suggesting that the overall allocation to sexual reproduction remained unchanged. Compared among functional groups of species we found a 42% increase in seed number (P < 0.01) of graminoids, a 33% increase (P = 0.07) in forbs, and no significant change in legumes (− 38%, n.s.) under elevated CO2. Large responses particularly of two graminoid species and smaller responses of many forb species summed up to the significant or marginally significant increase in seed number of graminoids and forbs, respectively. In several species the increase in seed number resulted both from an increase in flowering shoots and an increase in inflorescence size. In most species, seeds tended to be heavier (+ 12%, P < 0.01), and N-concentration of seeds was significantly reduced in eight out of 13 species. The fraction of germinating seeds did not differ between seeds produced in ambient and elevated CO2, but time to germination was significantly shortened in two species and prolonged in one species when seeds had been produced in elevated CO2. Results suggest that species specific increases in seed number and changes in seed quality will exert substantial cumulative effects on community composition in the long run.