Abstract. Grasslands cover around two thirds of the land area of Great Britain (GB) and are important reservoirs of terrestrial biological carbon (C). Outside a few well-monitored sites the quantification of C dynamics in managed grasslands is made complex by the spatio-temporal variability of weather conditions combined with grazing and cutting patterns. Earth observation (EO) missions produce high-resolution frequently-retrieved proxy data on the state of grassland canopies but synergies between EO data and biogeochemical modelling to estimate grassland C dynamics are under-explored. Here, we show the potential of model-data fusion (MDF) to provide robust near-real time analyses of managed grasslands of GB (England, Wales andScotland). We combine EO data and process-based modelling to estimate grassland C balance and to examine the role of management. We implement a MDF algorithm to (1) infer grassland management from vegetation reduction data (Proba-V), (2) optimise model parameters by assimilating leaf area index (LAI) data (Sentinel-2) and (3) simulate livestock grazing, grass cutting, and C allocation and loss to the atmosphere. The MDF algorithm was applied for 2017 and 2018 at 1855 fields sampled from across GB. The algorithm was able to effectively assimilate the Sentinel-2 based LAI time series (overlap = 80 %, RMSE = 1 gCm−2, bias = 0.35 gCm−2) and predict livestock densities per area that correspond with independent census-based data (r = 0.68). The mean total removed biomass across all simulated fields was 6 (±1.8) tDM ha−1 y−1. The simulated grassland ecosystems were on average C sinks in 2017 and 2018; the GB-average net ecosystem exchange (NEE) and net biome exchange (NBE) for 2017 was −232 ± 94 and for 2018 was −120 ± 103 gCm−2 y−1. The 2018 summer drought reduced C sinks, with a 9-fold increase in the number fields that were C sources (NBE > 0) in 2018 compared to 2017. We conclude that management in the form of sward condition and the timing, intensity and type of defoliation are key determinants of the C balance of managed grasslands. Nevertheless, extreme weather, such as prolonged droughts, can convert grassland C sinks to sources.