Abstract: We hypothesize that plant species diversity is favoured when actual resource supply ratios are balanced according to the optimum resource supply ratios for the vegetation as a whole. This ‘resource balance hypothesis of plant species diversity’ (RBH) follows from two different mechanisms of plant species coexistence, namely: ‘differential resource limitation’, which allows species to coexist in a competitive equilibrium in a homogeneous environment and ‘micro-habitat differentiation’, which builds on spatial heterogeneity. Both mechanisms require that resource supply ratios are intermediate between the optimum supply ratios of the species present in the species pool. Additional conditions, concerning the resource acquisition and requirement ratios of the species, are easier to meet for the second mechanism than for the first. To test the RBH we measured species diversity parameters in 74 grassland plots, as well as the N, P and K concentrations in the above-ground biomass. We used a new ceiling detection algorithm to examine the relationship between maximum observed diversity and the N/P-, P/K- and K/N-ratios in the biomass. Most of these ceiling relationsips could be described by parabolic curves with significant quadratic terms. This indicates that high diversity does not occur at the extremes of the observed ranges of nutrient ratios. This supports the RBH.