SUPPLEMENTARY INFORMATION Appendix S1: Differences in productivity between valleys and slopes Differences in productivity between the two habitats were tested by sampling above-ground biomass of grasses and forbs in 21 quadrates of 20X20cm in the control plots of each habitat (a stratified random sampling of 7 quadrates per plot). The results indicated that valleys were much more productive than slopes (mean+1SE above-ground biomass = 10.70+0.70 vs. 5.17+0.58 g), that differences among plots within each habitat were not significant (P > 0.05), and that the differences between the two habitats were caused by higher biomass of grass species in the valleys (see figure below). Repeated measures analysis of the data with group type (grasses vs. forbs) as a within-subject effect and habitat type as a between-subject effect indicated that the effects of habitat type, group type, and their interactions were all highly significant (P < 0.0001 for all effects,). Appendix S2: Statistical analysis of the grass removal experiment The effect of habitat type (valley vs. slope), treatment (control vs. grass removal), and their interaction on species richness at the quadrate scale was analyzed using the SAR model: yijk 0 1 Habitat i 2Treatment j 3 ( Habitat Treatment) ij ijk , W where y is the average richness per quadrate within a given cluster, i is an index for a pair of matched plots in a given habitat (valley = 0, slope = 1), j is an index for a particular plot in a given habitat and under a given treatment (control = 0, grass removal = 1), k is an index for the particular cluster of quadrates (N = 60 clusters), is the vector of error terms, spatially weighted using the weights matrix W (we used standardized weights where each neighbor in the plot-pair has the same weight), is the spatial error coefficient, and is a vector of uncorrelated error terms. The effect of habitat type, treatment, and their interaction on species richness at the cluster scale was analyzed using the same model with yijk representing the number of species per cluster (N = 60 clusters). The effect at the plot scale was tested using linear regression similar to the spatial model, but with no correlation between the error terms (N = 12 plots): yij 0 1 Habitat i 2Treatment j 3 ( Habitat Treatment) ij ij , ij ~ N (0, 2 ) . The corresponding effects on beta diversity (βRC) were tested using linear regression. The model constructed for the quadrate scale was: yijk 0 1 Habitat i 2Treatment j 3 ( Habitat Treatment) ij ijk , ijk ~ N (0, 2 ) Where yijk is the average value of βRC per cluster, and i, j, and k are indices for pairs of matched plots, individual plots, and clusters, respectively (N = 60 clusters). A similar model was used for analyzing beta diversity at the cluster scale but here k indicates a pair of clusters between which the value of βRC is calculated (N = 120 pairs). In the latter analysis correlation exists between beta diversity indices that are based on the same cluster. We controlled for the correlation by fitting the regression model using methods for general linear models. 1 Appendix S3: Analysis of species richness and beta diversity in the sowing experiment Here we present a similar analysis for that presented in figure 5 of the main text, but calculate richness, beta diversity, and the null values of beta diversity based on the quadrates for which data on species abundance were available for the first year (four quadrates in the valleys and six quadrates on the slopes). The upper two panels show the average number of species per quadrate in the valleys (left) and on the slopes (right) during the three years of the study. For each year we determined richness at the seedling stage and at the adult (flowering) stage. The lower four panels present the results obtained from the null model analysis of beta diversity. In contrast to the analysis presented in figure 5, here species were sampled based on their relative abundance in the first year (seedling stage of 2011). For each type of habitat, beta diversity was determined using two indices, a presence-absence index (Jaccard index of dissimilarity) and an abundance-based index (Bray & Curtis measure of dissimilarity). Histograms represent the distribution of the relevant index under the null hypothesis and vertical dashed lines indicate the observed values. ES=effect size (see main text for definition) Valley Slope Seedlings Adults Year Jaccard Jaccard P<0.0031 ES=0.149 P<0.5055 ES=-0.002 Bray & Curtis Bray & Curtis P<0.0001 ES=1.851 P<0.0190 ES=0.076 2 Beta diversity