Despite the increasing extent of protected areas throughout the world, biodiversity decline continues. Grazing management that promotes both biodiversity and production outcomes has the potential to improve broad-scale conservation and complement the protected area network. In this study we explored the potential to integrate commercial livestock grazing and conservation in a semi-arid rangeland in south-eastern Australia. Understorey floristic composition and diversity were compared at different spatial scales across three grazing management treatments: (1) continuous commercial grazing management where paddocks were grazed for the majority of the year (≥8 months per annum); (2) rotational commercial grazing management where livestock are frequently rotated and paddocks rested for >4 months per annum; and (3) protected areas managed for conservation with domestic livestock excluded and grazed only by native and feral herbivores. The season of sampling, rainfall, soil characteristics and the spatial location of sites were the dominant drivers of variability in understorey plant species composition; the effect of grazing treatment on understorey plant species composition was relatively minor. However, areas managed for conservation and under rotational forms of commercial grazing management generally had greater floristic richness and diversity than continuously grazed areas, the results varying with season (spring/autumn) and soil type (clay/sandy-loam), particularly at fine scale (1-m2 quadrats). These findings indicate that rotational grazing management on commercial properties has the potential to improve biodiversity conservation outside the reserve system compared to conventional grazing management.