While invasive species may be visible indicators of plant community degradation, they may not constitute the only, or even the primary, limitation to stand regeneration. We used seed-augmentation and grass-removal experiments under different canopy conditions to assess the relative importance of dispersal limitation, resource availability, and competition on seedling establishment in the understory shrubs Sophora chrysophilla, Dodonea viscosa, and Pipturus albidus in a montane mesic forest in Hawaii. The study location was an Acacia koa-Metrosideros polymorpha forest at 1000-1500 m elevation on the leeward side of Hawaii Island; it is a closed-canopy forest historically subject to logging and grazing by cattle and sheep and currently dominated by the exotic grass, Ehrharta stipoides, in the herb layer. Seedling establishment after 1 and 2 years was strongly dispersal limited in Sophora and Dodonea, but not in Acacia, a non-augmented species in which abundant seedlings established, nor in Pipterus, in which only one seedling established in 2 years. Grass cover reduced seedling establishment in Acacia, Sophora, and Dodonea and, for the latter two species, seedling establishment was substantially greater in the warmer, more moist forest at the lowest elevation. Light, moisture, and resin-captured N and P were more strongly affected by elevation and canopy composition than by grass cover, but in most cases seedling establishment was not positively correlated with resource availability. Limitations to the establishment of woody seedlings in this forest-grassland mixture vary among species; however, both dispersal limitation and competition from a shade-tolerant grass are important deterrents to regeneration in these forests.