Woody encroachment is ubiquitous in grassy ecosystems worldwide, but its global impacts on the diversity of herbaceous plants that characterise and define these ecosystems remain unquantified. The pervasiveness of encroachment is relatively easily observed via remote sensing, but its impacts on plant diversity and richness below the canopy can only be observed via field-based studies. Via a meta-analysis of 42 field studies across tropical to temperate grassy ecosystems, we quantified how encroachment altered herbaceous species richness, and the richness of forbs, C3 graminoids and C4 graminoids. Across studies, the natural logarithm of the response ratio (lnRR) of herbaceous species richness ranged from −3.33 to 0.34 with 87% of encroached ecosystems negatively impacted. Assessment of the extent of encroachment, duration of encroachment, mean annual rainfall, latitude, and continent demonstrated that only extent of encroachment had relevance in the data (univariate model including a random effect of study explained 45.4% of variance). The global weighted mean lnRR of species richness decreased from −0.245 at <33% of woody cover increase, to −0.562 at 33%–66%, and to −0.962 at >66%. Continued encroachment results in substantial loss of herbaceous diversity at medium and high extents, with a loss of richness that is not replaced. Although all functional groups are significantly negatively impacted by encroachment, forb richness is relatively more sensitive than graminoid richness, and C4 graminoid richness relatively more than C3 graminoid richness. Although no geographic or climatic correlates had relevance in the data, encroachment as an emergent product of global change coalesces to decrease ground layer light availability, lead to loss of fire and grazers, and alter hydrology and soils. Encroachment is accelerating and grassy ecosystems require urgent attention to determine critical woody cover thresholds that facilitate diverse and resilient grassy ecosystems.