In western Europe, xeric sandy calcareous grasslands have been reduced to a few small and isolated fragments, as a result of sand quarrying and abandonment of agro‐pastoral practices leading to tree encroachment. The restoration of dry grasslands usually consists of reopening the land by cutting trees and removing the litter or the topsoil, relying on seed rain and soil seed bank for recolonization. We investigated whether the soil seed bank of degraded sandy grasslands can be a suitable tool in the restoration of typical sandy grassland communities. We examined the soil seed bank and the vegetation composition in a total of 20 plots of extant and recently restored sandy grasslands (Sedo‐Cerastion) in southern Belgium. Seed density ranged from 611 to 38,808 seeds/m2. Dry grassland species accounted for 42% of the soil seed bank in extant grasslands but dropped to 17% for restored sites, which were dominated by species from artificial pioneer habitats. Only a small number of the 122 species recorded in the vegetation germinated from the soil seed bank samples. Most of these were common species with large ecological amplitude (e.g., Arenaria serpyllifolia, Poa annua, and Rumex acetosella), already present in the site. The typical sandy grassland specialists (e.g., Cardaminopsis arenosa, Dianthus deltoides, Helichrysum arenarium, and Petrorhagia prolifera) were missing from the seed bank, except when present in the vegetation. Therefore, a successful restoration of degraded sandy grasslands based on local seed banks is unlikely. Additional management actions, such as active seed sowing of target species, may be necessary.