In temperate grasslands, the relative importance of above ground competition for light compared to below ground competition for water and nutrients is hypothesized to increase with increasing precipitation. Thus, competition for light is likely to exert an increasing influence on canopy structure and species composition as precipitation increases. We quantified canopy structure, light availability and changes in species composition at seven sites across the central grassland region of the United States to determine how these properties change across a precipitation gradient. Across the region, there was a disproportionate increase in leaf area and canopy height with increasing precipitation, indicating that plants become taller and leafier across the gradient. Leaf area index increased by a factor of 12 across the gradient while above-ground net primary productivity increased by a factor of only 5.5. As precipitation increased, there was decreased light availability at the soil surface, increased seasonal variability in light transmission, increased biomass and leaf area at higher canopy layers and an increased proportion of tall statured species. These observed changes in canopy structure support the prediction that competition for light increases in importance with increasing precipitation.