Savanna plant communities change considerably across time and space. The processes driving savanna plant species diversity, coexistence and turnover along environmental gradients are still unclear. Understanding how species respond differently to varying environmental conditions during the seedling stage, a critical stage for plant population dynamics, is needed to explain the current composition of plant communities and to enable us to predict their responses to future environmental changes. Here we investigate whether seedling response to changes in resource availability, and to competition with grass, varied between two functional groups of African savanna trees: species with small leaves, spines and N-fixing associations (fine-leaved species), and species with broad leaves, no spines, and lacking N-fixing associations (broad-leaved species). We show that while tree species were strongly suppressed by grass, the effect of resource availability on seedling performance varied considerably between the two functional groups. Nutrient inputs increased stem length only of broad-leaved species and only under an even watering treatment. Low light conditions benefited mostly broad-leaved species' growth. Savannas are susceptible to ongoing global environment changes. Our results suggest that an increase in woody cover is only likely to occur in savannas if grass cover is strongly suppressed (e.g. by fire or overgrazing). However, if woody cover does increase, broad-leaved species will benefit most from the resulting shaded environments, potentially leading to an expansion of the distribution of these species. Eutrophication and changes in rainfall patterns may also affect the balance between fine- and broad-leaved species.