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The Patagonian steppe consists of shrubs encircled by relatively dense stands of grasses; the areas between shrubs have scattered tussocks, interspersed with bare soil. This study investigates the seed bank and the establishment of the perennial grass Bromus pictus around shrubs and in the scattered-tussock patches, with special attention to root competition. About 20 times more seeds of B. pictus were found in the soil of the dense grass zone around shrubs than in the scattered-tussock patches. B. pictus seeds were placed in both types of patches, either with the natural level of below-ground competition present, or experimentally reduced by a fine mesh. Seedling survival and growth were reduced by root competition. Where root competition was experimemtally reduced, the aerial protection afforded by the shrub increased the growth of seedlings. Root competition between adult plants and seedlings is mainly for soil water, and is greater near shrubs than in the scattered-tussock patches. Root competition from established plants is greater than the aerial protection afforded by shrubs, in the area close to shrubs. -Authors