Aims: We assessed what the effects of fire and grazing are on vegetative growth and sexual reproduction of Brachypodium retusum, the dominant species of Mediterranean Thero‐Brachypodietea grasslands (“steppes”) and on species composition of the associated plant community. Location: 'La Crau', southeastern France. Methods: We set up a split‐plot experiment testing the effects of fire season (winter, summer) and grazing on plant cover, inflorescence number, seed set and germination of Brachypodium retusum in traditionally grazed grasslands. We further analyzed plant species composition and diversity in vegetation relevés. The same fire treatments were tested in a second experiment in long‐term grazing exclosures. Results: Brachypodium retusum showed a rapid post‐fire recovery, but other species of the associated plant community, in particular annuals, recovered as fast or even faster. Fire increased Brachypodium retusum inflorescence production and seed set per inflorescence and this effect was stronger in the summer fire treatment. At the community level, fire significantly increased species richness, evenness and Bray–Curtis dissimilarity in the second post‐fire season and again, the summer fire effect was stronger. Grazing exclusion for two seasons had only a small effect on Brachypodium retusum and the associated plant community. The effect of both fire treatments on Brachypodium retusum was similar in long‐term exclosures. In these exclosures, fire resulted in a community shift towards the species composition of traditionally grazed steppes. Conclusions: The concomitant positive effects of experimental burning on Brachypodium retusum reproduction and on plant diversity of Mediterranean steppe vegetation suggest that the system is adapted to fire as an important driver of community composition. Annual species surviving as seeds are as successful in post‐fire recovery as perennial resprouters. Prescribed burning may be an alternative strategy to restore community structure in abandoned (ungrazed) steppes showing a decline in typical grassland species after several years of grazing abandonment.