Grasslands are predicted to experience a major biodiversity change by the year 2100 in part due to recent and projected increases in atmospheric CO2 concentration. A better understanding of how grasslands have responded to past environmental changes will help predict the outcome of current and future environmental changes. Here, we explore the relationship between past atmospheric CO2 and temperature fluctuations and the shifts in diversification rate of grasses (Poaceae) and daisies (Asteraceae), two exceptionally species-rich grassland families (≈ 11,000 and ≈ 23,000 species, respectively). To this end, we developed a novel Bayesian approach that simultaneously estimates diversification-rates through time from time-calibrated phylogenies and correlations between environmental variables and diversification rates. Additionally, we developed a new statistical approach that incorporates the information of the distribution of missing species in the phylogeny. We found strong evidence supporting a simultaneous increase in diversification rates for daisies and grasses after the most significant reduction of atmospheric CO2 in the Cenozoic (≈ 34 Mya). The fluctuations of paleo-temperatures, however, appear not to have had a significant relationship with the diversification of these grassland families. Overall, our results shed new light on our understanding of the origin of grasslands in the context of past environmental changes.