Abstract Maternal effects (i.e. trans-generational plasticity) and soil legacies generated by drought and plant diversity can affect plant performance and alter nutrient cycling and plant community dynamics. However, the relative importance and combined effects of these factors on plant growth dynamics remain poorly understood. We used soil and seeds from an existing plant diversity and drought manipulation field experiment in temperate grassland to test maternal, soil drought and diversity legacy effects, and their interactions, on offspring plant performance of two grassland species (Alopecurus pratensis and Holcus lanatus) under contrasting glasshouse conditions. Our results showed that drought soil legacy effects eclipsed maternal effects on plant biomass. Drought soil legacy effects were attributed to changes in both abiotic (i.e. nutrient availability) and biotic soil properties (i.e. microbial carbon and enzyme activity), as well as plant root and shoot atom 15N excess. Further, plant tissue nutrient concentrations and soil microbial C:N responses to drought legacies varied between the two plant species and soils from high and low plant diversity treatments. However, these diversity effects did not affect plant root or shoot biomass. These findings demonstrate that while maternal effects resulting from drought occur in grasslands, their impacts on plant performance are likely minor relative to drought legacy effects on soil abiotic and biotic properties. This suggests that soil drought legacy effects could become increasingly important drivers of plant community dynamics and ecosystem functioning as extreme weather events become more frequent and intense with climate change. A plain language summary is available for this article.