Herbivores may increase or decrease aboveground plant productivity depending on factors such as herbivore density and habitat productivity. The grazing optimization hypothesis predicts a peak in plant production at intermediate herbivore densities, but has rarely been tested experimentally in an alpine field setting. In an experimental design with three densities of sheep (high, low, and no sheep), we harvested aboveground plant biomass in alpine grasslands prior to treatment and after five years of grazing. Biomass of vascular plants decreased at high sheep density, and marginally increased at low sheep density. The ungrazed treatment was found to be intermediate. Companion studies conducted at the same site suggest, (1) that changes in soil N-mineralization and plant community patterns are contributing to the herbivore-induced effects on plant productivity in alpine grasslands, (2) that herbivore-driven changes in plant productivity feed into the future performance for the herbivore as the marginal increase in productivity at low density corresponds with a temporal increase in lamb growth. Our study provides experimental evidence for a nonlinear effect of increased grazing on plant productivity as predicted by the grazing optimization hypothesis. This has important repercussions for ecosystem function and management, as it demonstrates how herbivore density can either increase or decrease ecosystem productivity over time.