Cropping systems that rely on renewable energy and resources and are based on ecological principles could be more stable and productive into the future than current monoculture systems with serious unintended environmental consequences such as soil erosion and water pollution. In nonagricultural systems, communities with higher species diversity have higher productivity and provide other ecosystem services. However, communities of well-adapted crop species selected for biomass production may respond differently to increasing diversity. Diversity effects may be due to complementarity among species (complementary resource use and facilitative interactions) or positive selection effects (e.g., species with higher productivity dominate the mixture), and these effects may change over time or across environments. Our goal was to identify the ecological mechanisms causing diversity effects in a biodiversity experiment using agriculturally relevant species, and evaluate the implications for the design of sustainable cropping systems. We seeded seven perennial forage species in a replicated field experiment at two locations in Iowa, USA, and evaluated biomass productivity of monocultures and two- to six-species mixtures over 3 years after the establishment year under management systems of contrasting intensity: one or three harvests per year. Productivity increased with seeded species richness in all environments, and the positive relationship did not change over time. Polyculture overyielding was due to complementarity among species in the community rather than to selection effects of individual species. Complementarity increased as a log-linear function of species richness in all environments, and this trend was consistent across years. Legume–grass facilitation may explain much of this complementarity effect. Although individual species with high biomass production had a major effect on productivity of mixtures, the species producing the highest biomass in monoculture changed over the years in most environments. Furthermore, transgressive overyielding was observed and was more prevalent in later years, in some environments. We conclude that choosing a single well-adapted species for maximizing productivity may not be the best alternative over the long term and that high levels of species diversity should be included in the design of productive and ecologically sound agricultural systems.