This study investigated changes in soil organic carbon (SOC) in a poorly drained clay loam soil under (i) permanent grassland (PG) over 7 years and (ii) after PG renovation over 2·5 years. The experimental area was divided into four blocks with four paddocks per block. Composite soil samples from each PG block were taken to 30-cm depth on five occasions between 2004 and 2011. In June 2008, one paddock per block was renovated by ploughing and reseeding and sampled as above on the latter four occasions. Renovation decreased SOC (P < 0·05) by 32·2 t ha−1 in the 2·5 years following ploughing; the difference developed almost entirely (86%) in the first four months. Renovation had no effect on above-ground productivity, standing root and stubble phytomass or on dissolved organic matter leaching. Therefore, soil respiration was considered to be a single potential pathway responsible for the SOC loss from renovated grassland. Although a simple linear regression indicated a tendency for PG to accumulate SOC, there was no evidence of recovery in SOC to previous levels following renovation during the study period. These results could have implications for greenhouse gas inventories in countries where PG is an important land-use type.