There is limited information on the effects of the increase in the density of shrubs on herbage production and nutritive value of natural grasslands in the Mediterranean region, currently facing major land use changes. Herbage production of drymatter (herbaceous fractions, of plant functional groups and by species), crude protein (CP), neutral-detergent fibre (NDF), acid-detergent fibre (ADF), acid-detergent lignin (ADL) and hemicellulose concentrations and in vitro organic matter digestibility were determined at the time of peak of annual growth across four types of grassland vegetation each characterized by different shrub cover regimes. A sharp reduction in herbage production and a reduction in nutritive value were found as a result of the increase in shrub cover. These changes appeared to be closely related to the shift in plant functional groups detected as shrub density increased. Herbage production from grasses and legumes was found to be more sensitive to shrub cover changes than herbage production from forbs, whereas, as grassland types became denser, annual species were gradually replaced by perennials and C4 grasses by C3 ones. The impact of shrub encroachment on Mediterranean grasslands is discussed in relation to their use by livestock.