We investigated what factors lead to invasion of exotics or re-colonization of native perennial grasses in the South Australian mid-north grasslands. We manipulated 160 experimental quadrats by clipping, irrigation and seed addition and assessed recruitment by exotics in an area dominated by perennial grasses and perennial grass recruitment in an area dominated by exotics. Treatment effects differed with season for exotics: their biomass increased with irrigation in autumn and seed addition in winter. However, in both periods other factors, probably soil properties, also had a strong effect. We detected no perennial grass seedlings in the quadrats over 1 year, possibly due to unsuitable environmental conditions or persistent high competition levels. Under controlled conditions the presence of the invasive annual Avena barbata had a strong negative effect on the recruitment of the native perennial Austrodanthonia caespitosa at any moisture and nutrient availability. Avena also germinated faster and more frequently than Austrodanthonia, especially at low soil moisture. During an imposed drought Austrodanthonia seedlings survived longer in the absence of Avena. The results suggest that annual exotics are highly responsive to resources and can quickly invade areas, while the re-colonization of invaded areas by native grasses requires a complex (and less likely) rainfall regime. ; Tanja I. Lenz and José M. Facelli ; The definitive version is available at www.blackwell-synergy.com