We tested the hypothesis that biodiversity decreases the spatial variability of biomass production between subplots taken within experimental grassland plots. Our findings supported this hypothesis if functional diversity (weighted Rao’s Q) was considered. Further analyses revealed that diversity in rooting depth and clonal growth form were the most important components of functional diversity stabilizing productivity. Using species or functional group richness as diversity measures there was no significant effect on spatial variability of biomass production, demonstrating the importance of the biodiversity component considered. Moreover, we found a significant increase in spatial variability of productivity with decreasing size of harvested area, suggesting small-scale heterogeneity as an important driver. The ability of diverse communities to stabilize biomass production across spatial heterogeneity may be due to complementary use of spatial niches. Nevertheless, the positive effect of functional diversity on spatial stability appears to be less pronounced than previously reported effects on temporal stability.