Although nutrient enrichment frequently decreases biodiversity, it remains unclear whether such biodiversity losses are readily reversible, or are critical transitions between alternative low- and high-diversity stable states that could be difficult to reverse. Our 30-year grassland experiment shows that plant diversity decreased well below control levels after 10 years of chronic high rates (95–270 kg N ha−1 year−1) of nitrogen addition, and did not recover to control levels 20 years after nitrogen addition ceased. Furthermore, we found a hysteretic response of plant diversity to increases and subsequent decreases in soil nitrate concentrations. Our results suggest that chronic nutrient enrichment created an alternative low-diversity state that persisted despite decreases in soil nitrate after cessation of nitrogen addition, and despite supply of propagules from nearby high-diversity plots. Thus, the regime shifts between alternative stable states that have been reported for some nutrient-enriched aquatic ecosystems may also occur in grasslands.