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1. To explore how rangeland grazing affects native plant diversity at local and regional scales, we measured the frequency of occurrence of plant species along six transects spread across a large region of and calcareous rangelands in north-western South Australia. Four transects were in commercial sheep-grazed paddocks and two were in otherwise similar lands that had never been developed for pastoralism. Each transect comprised four sites of area 0.5 km(2), at distances of 1, 4, 7 and 10 kin from the nearest stock watering point in a paddock, or from a nominal starting point >10 km from water in the undeveloped lands.

2. Nearly 200 plant species were recorded, but distributions were patchy, with >30% of species present at <10% of sites.

3. The apparent influence of pastoral development and proximity to water varied with the scale of inquiry. At the regional level, pastoral development had a predominantly negative effect on the abundance of species: 16 species were less abundant in paddocks than in lands that had never been developed, and only one species was more abundant. Localized trends within paddocks were more positive: significantly more species showed trends of increasing abundance with increasing proximity to watering points and associated grazing activity.

4. The study results are consistent with a general pattern whereby pastoral development enhances richness of plant species at a local scale (by providing opportunities for more species to establish) but has the potential to decrease it at a regional scale (by removing the most grazing-sensitive species from the regional species pool).

5. The results suggest there may be two fundamentally different mechanisms whereby species decline in abundance under grazing. Palatable, drought-hardy, perennial species are more likely to decline in abundance with proximity to water and associated accumulated grazing pressure in paddocks. Uncommon or short-lived species that are selectively grazed during very good seasons are more likely to decline everywhere in paddocks, regardless of the location of water points.

6. If both mechanisms contribute to species decline there may need to be a mix of strategies for protecting all species in any regional network of conservation reserves.