Compensatory increases in net photosynthetic assimilation rates (A_net) following herbivory are well documented in adult rangeland grasses but have not been quantified in bunchgrass seedlings, which may be more sensitive to tissue loss than established plants. To address this, we twice removed 30% and 70% leaf area of seedlings of crested wheatgrass (Agropyron cristatum [L.] Gaertn., var. Hycrest II) and the native bluebunch wheatgrass (Psuedoroegnaria spicata [Pursh] Á. Love, var Anatone) and compared A_net and aboveground and belowground growth of these to unclipped control plants. Compensatory A_net occurred only after the second clipping, roughly 1 month after the first, and was similar in magnitude and duration between species and treatments, ca. 26% higher than control plant A_net for 2 weeks following clipping. Despite similar compensatory A_net between species, increases in A_net were more proportional with increased stomatal conductance to water vapor (g_s) in crested wheatgrass. This resulted in higher intrinsic water use efficiency (WUE_i = A_net/g_s) integrated across the postclipping recovery period compared with WUE_i of bluebunch seedlings, which declined with clipping. Differences in WUE_i were attributable to differences in root-to-shoot ratios and root tissue quality (specific root mass; g dry mass · m^-2 root area), which were lower in crested wheatgrass. We concluded that compensatory photosynthesis is an important component of seedling herbivory tolerance, and that observed differences in post-herbivory WUE_i could help improve management strategies by informing seedling selection criteria to help develop methods aimed at minimizing impacts of herbivory during the seedling stage.