Grasslands being used in sheep farming systems are managed under a variety of agricultural production, recreational and conservational objectives. Although sheep grazing is rarely considered the best method for delivering conservation objectives in seminatural temperate grasslands, the literature does not provide unequivocal evidence on the impact of sheep grazing on pasture biodiversity. Our aim was therefore to review evidence of the impacts of stocking rate, grazing period and soil fertility on plant communities and arthropod populations in both mesotrophic grasslands typical of agriculturally improved areas and in native plant communities. We therefore conducted a literature search of articles published up to the end of the year 2010 using 'sheep' and 'grazing' as keywords, together with variables describing grassland management, plant community structure or arthropod taxa. The filtering process led to the selection of 48 articles, with 42 included in the stocking rate dataset, 9 in the grazing period dataset and 10 in the soil fertility dataset The meta-analysis did not reveal any significant trends for plant species richness or plant community evenness along a wide stocking rate gradient. However, we found frequent shifts in functional groups or plant species abundance that could be explained by the functional properties of the plants in the community. The meta-analysis confirmed that increasing soil fertility decreased plant species richness. Despite the very limited dataset, plant species richness was significantly greater in autumn-grazed pastures than in ungrazed areas, which suggests that choosing an appropriate grazing period would be a promising option for preserving biodiversity in sheep farming systems. Qualitative review indicated that low grazing intensity had positive effects on Orthoptera, Hemiptera (especially phytophagous Auchenorrhyncha) and, despite a diverse range of feeding strategies, for the species richness of Coleoptera. Lepidoptera, which were favoured by more abundant flowering plants, also benefited from low grazing intensities. Spider abundance and species richness were higher in ungrazed than in grazed pastures. In contrast, there are insufficient published studies to draw any firm conclusions on the benefits of late grazing or stopping fertilization on insect diversity, and no grounds for including any of this information in decision support tools at this stage.