1. Plant populations can exhibit local adaptation to their abiotic environment, such as climate and soil properties, as well as biotic components such as the chemical signatures of dominant plant species and mutualistic and pathogenic microbial populations. While patterns of local adaptation in individual species are widely recorded, the importance of microevolutionary processes for plant community assembly and function is poorly understood. 2. Here we examined how a history of long-term co-existence, and thus potential for local co-adaptation, influenced the process of plant community assembly. Soil inocula and seeds of eight plant species were collected from three calcareous grasslands with a long history of grazing within a single geographical region. Mesocosm communities were established using local genotypes from a single site or an artificial mixture of genotypes from two different sites. To investigate the role of root exudates and local (“home”) and non-local (“away”) soil biota as mediators of plant species co-existence, the population origin treatment was combined with the addition of activated carbon, which is known to adsorb exudates from soil, and sterilisation of soil inocula. Individual-, species- and mesocosm-level responses were measured over the course of three growing seasons. 3. We found that root exudates promoted seedling survival, species co-existence and productivity in assemblages of genotypes originating from the same community but had a weak impact in mixed, novel communities. Soil biota promoted the growth of subordinate forbs and restrained the growth of dominant graminoids, particularly in communities composed of local genotypes. The effects of population origin were significant in the first two years of the experiment but were not detectable in the third year when interbreeding and new seedling establishment took place. Plant genotypes coupled with “home” microbial inoculum experienced a stronger reduction in growth compared with genotypes exposed to “away” inoculum, indicating that plants experienced home-field disadvantage in interactions with soil biota. 4. Synthesis. Our study demonstrates that the mechanisms of initial grassland community assembly depend on community history, with belowground chemical interactions and plant interactions with soil biota becoming stronger drivers of dynamics in established and potentially co-evolved communities.