Intraspecific trait variation (ITV) is thought to play a significant role in community assembly, but the magnitude and direction of its influence are not well understood. Although it may be critical to better explain population persistence, species interactions, and therefore biodiversity patterns, manipulating ITV in experiments is challenging. We therefore incorporated ITV into a trait- and individual-based model of grassland community assembly by adding variation to the plants’ functional traits, which then drive life-history trade-offs. Varying the amount of ITV in the simulation, we examine its influence on pairwise-coexistence and then on the species diversity in communities of different initial sizes. We find that ITV increases the ability of the weakest species to invade most, but that this effect does not scale to the community level, where the primary effect of ITV is to increase the persistence and abundance of the competitively-average species. Diversity of the initial community is also of critical importance in determining ITV’s efficacy; above a threshold of interspecific diversity, ITV does not increase diversity further. For communities below this threshold, ITV mainly helps to increase diversity in those communities that would otherwise be low-diversity. These findings suggest that ITV actively maintains diversity by helping the species on the margins of persistence, but mostly in habitats of relatively low alpha and beta diversity.