Societal Impact Statement Rangelands harbor immense diversity and provide ecosystem services across vast swaths of land while supporting rural economies and the food system, but degraded rangelands may require active management to restore diversity and function. We added varying amounts of compost to understand if there are linear or saturating effects on vegetation and soil characteristics. We found linear effects on water movement and soil carbon, but little effect on vegetation community or abundance. Our results provide guidance for grassland managers to make cost–benefit analyses for using compost in their own situations. Summary Dry rangelands systems coproduce food and other ecosystem services, but degradation of productivity, diversity, and water holding capacity may require active intervention to restore function. Compost amendments on grasslands have improved vegetation, soil carbon, and water characteristics, but practitioners lack guidance of optimal use to meet their management goals. We compared surface‐dressed compost additions up to 2.5 cm at two ranches in New Mexico, USA, and measured plant composition and biomass, soil bulk density, hydraulic conductivity, aggregate stability, and total carbon content (0–10 cm depth) up to two years after addition. We used model selection to determine if response relationships with compost amount were supported, linear, or non‐linear. We found that 2.5 cm compost additions nearly doubled litter cover after two years. Soil carbon increased linearly with compost depth, with the 2.5 cm depth nearly doubling carbon content compared to control after two years. Hydraulic conductivity increased linearly with compost depth in the first year at one site. Other variables showed little response to compost. Overall, we did not identify strong saturating responses over this range of compost additions. Our results provide guidance for land stewards to assess their resources and management goals to optimize compost addition to build rangeland soil health.