The Cape grassbird was formally described in 1789 by the German naturalist Johann Friedrich Gmelin in his revised and expanded edition of Carl Linnaeus's Systema Naturae.

[2] Gmelin based his description on the "spotted yellow flycatcher" from the Cape of Good Hope that had been described in 1783 by the English ornithologist John Latham in his book A General Synopsis of Birds.

[7][8] Within the family Macrosphenidae the moustached grass warbler (Melocichla mentalis) and the Cape grassbird are sister species.

[8] The long, pointed, straggly tail, chestnut cap and facial stripes are diagnostic of Cape grassbird.

It is much larger than any cisticola, and the heavily streaked back and the pointed tail eliminate confusion with moustached grass warbler.