The effect of climatic variation on terrestrial aboveground productivity (ANPP) has been well studied. However, little is known about how variable climate, including drought, may influence belowground productivity (BNPP), which constitutes most of the annual primary production of grasslands. The objectives of this study were to (1) examine how a 3-year period of declining moisture, which began as climatically wet to average across Yellowstone National Park (YNP) and ended in drought, affected ANPP and BNPP in grasslands of YNP and (2) how herds of grazing ungulates, which were shown previously to stimulate grassland shoot and root growth in YNP, may have interacted with climatic conditions to influence grassland production. ANPP and 0-20 cm BNPP, representing the bulk of the root dynamics, were measured in grazed and ungrazed (fenced) grassland at nine sites ranging widely in elevation, soil conditions and plant production during the 3-year study. Results revealed that 0-20 cm BNPP was strongly influenced by drought (P = 0.0005) and declined from 1999 to 2001 among ungrazed and grazed grasslands by 39 and 49%, respectively. The greater reduction in 0-20 cm BNPP among grazed grasslands was due, in part, to a decline (P = 0.07) in the stimulatory effect of grazing, i.e., the ratio g BNPP stimulated: g shoot consumed. In contrast, ANPP was unaffected by drought in either type of grassland. Thus, the effect of this drought in YNP was a large reduction in BNPP, which was a function of (1) a direct negative influence of increased moisture stress on root growth and (2) a weak interaction between drought and herbivory that led to a decline in the positive feedback from grazers to BNPP. These findings highlight the need to better understand factors that control root growth and to study the effects of climatic variation on grasslands within an ecosystem framework to include potentially important climate-consumer interactions.