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Quantifying the relationship of different grass functional groups to increasing woody plant cover is necessary to better understand the effects of woody plant encroachment on grasslands. This study explored biomass production responses of three perennial grass groups based on photosynthetic pathway and potential canopy height (C4 short-grasses, C3 midgrasses, and C4 midgrasses) to different percent canopy covers of the surrounding deciduous woody legume, honey mesquite (Prosopis glandulosa). Two methods were used to determine mesquite canopy cover, line-intercept and geospatial analysis of aerial images, and both were used to predict production of the three grass groups. Five years of grass production data were included in the mesquite cover/grass production regressions. Two yr had extreme grass production responses, one due to drought and the other to high rainfall. Of the 3 remaining yr, best-fit curves were negative linear for C4 short-grasses and C3 midgrasses and negative sigmoidal for C4 midgrasses using both cover determination methods, although slopes of the curves differed between cover determination methods. C4 midgrasses were more sensitive than the other grass groups to increasing mesquite cover. Loss of production potential when mesquite cover increased from 0% to 35% was 75.5%, 28.7%, and 23.2% for C4 midgrasses, C3 midgrasses, and C4 short-grasses, respectively. Moreover, production potential of C4 midgrasses under no mesquite cover was 3 and 6 times greater than C3 midgrasses or C4 short-grasses, respectively. Spatial settings of the different grass groups in relation to mesquite tree size and size of intercanopy areas provided indirect evidence that the process of mesquite encroachment in the past 50−100 yr may have negatively impacted C4 midgrasses more than the other grass groups. Results suggest that gains in grass production following mesquite treatment would be limited if the system has degraded to where only C3 midgrasses and C4 short-grasses dominate.