1. The extensive loss of species-rich grasslands in Europe as a result of agricultural intensification has triggered a desire to recreate more diverse and natural grassland systems in set-aside fields. Appropriate management and species introductions are necessary to overcome residual soil fertility, lack of suitable plant propagules and dominance of undesirable invasive species. 2. A field experiment was performed in a boreal former hayfield to test the effect of turf inoculation, mowing (twice annually) and spring burning. We surveyed changes in plant diversity, composition and productivity over a 3-year period. Signature fatty acids and soil respiration measurements were employed to survey changes in the soil community. 3. Few changes in the vegetation and soil communities could be related to inoculation of turf monoliths. Most of the measured variables in mown plots differed from the set-aside (control) plots, while burned plots displayed mainly similar responses. Mowing increased plant species richness and diversity, mainly by enhancing the number and frequency of forb species. Small-statured forb species were promoted by mowing, whereas tall leafy grasses declined. Effects of mowing on soil communities comprised an increased soil respiration and stimulation of arbuscular mycorrhizal fungi. 4. Synthesis and applications. The results demonstrate the importance of reducing sward height in order to promote plant species coexistence in former boreal hayfields. In such systems, eliminating accumulated litter by spring burning has little influence on species composition when the sward is allowed to grow tall. Mowing is therefore the most efficient way of enhancing biodiversity. The results also show that mowing-mediated changes in above-ground plant communities may stimulate below-ground symbiotic micro-organisms, potentially resulting in a positive feedback on ecosystem development.