A new and distinct cultivar of Hydrangea macrophylla (Thunb.) named ‘Grace’ originated as a controlled cross between unpatented varieties. The cultivar ‘Grace’ can be blue or red depending on the acidity of the soil and the presence of aluminum, but is preferably grown as a red variety. The variety ‘Grace’ has large attractive inflorescences with large sepalous florets, distinct sepal pigmentation and good tolerance to cold temperatures. The upperside of the sepals is R.H.S. 63 A (red-purple group), the underside of the sepals is R.H.S. 63 D (red-purple group)