A recent debate among ecologists has focused on mechanisms by which species diversity might affect net primary productivity. Communities with more species could use a greater variety of resource capture characteristics, leading to greater use of limiting resources (complementarity) and therefore greater productivity (overyielding). Recent experiments, however, have shown a variety of relationships between diversity and productivity. In an experiment on serpentine grassland communities spanning 8 years, we found that overyielding increased several years after plot establishment. Overyielding varied greatly depending on the functional characteristics of the species involved and the biotic and abiotic environment (particularly water availability). While functional differences among species led to strong complementarity and facilitation, these effects were not sufficient to cause significant transgressive overyielding or consistent increases in productivity with increased plant diversity. These results suggest that greater absolute production with greater diversity may be restricted to particular species combinations or environmental conditions.