Land-use intensification is the major threat for biodiversity in agricultural grasslands, and fertilization has been suggested as themost important driver. A common explanation for the decline of bryophyte diversitywith higher land-use intensity is an indirect negative effect via the increase in vascular plant productivity, which reduces light levels for bryophytes. However, direct negative effects of land-use intensification may also be important. Here, we disentangle direct and vascular plant biomass mediated indirect effects of land use on bryophytes. We analyzed two complementary datasets from agricultural grasslands, an observational study across 144 differently managed grasslands in Germany and an experimental fertilization and irrigation study of eleven grasslands in the Swiss Alps. We found that bryophyte richness and cover strongly declined with land-use intensity and in particular with fertilization. However, structural equationmodelling revealed that although both direct and indirect effectswere important, the direct negative effect of fertilization was even stronger than the indirect effectmediated by increased plant biomass. Thus, our results challenge the widespread view that the negative effects of fertilization aremostly indirect and mediated via increased light competition with vascular plants. Our study shows that land use intensification reduces bryophyte diversity through several different mechanisms. Therefore, only low-intensity management with limited fertilizer inputs will allow the maintenance of bryophyte-rich grasslands.