The authors studied the development of the shrub Baccharis pilularis ssp consanguinea and its effects on herbs of the annual grassland in Northern California. A series of stands of Baccharis was sampled of ages ranging from 1 yr to > 9 yr, representing most of the life cycle of the shrub. In each stand the authors examined shrub biomass, structure and litterfall. They also determined cover and biomass of all herbaceous species and estimated seed production, seed rain and storage of seed in the soil. Abundance of all herbaceous species declined greatly after Baccharis formed a closed canopy at 2-3 yr, and little seed of herbaceous species was either dispersed into shrub stands or stored in the soil. Exclosures suggested that herbivory by small mammals in the closed shrub stands may be important in reducing the abundance of herbaceous species following shrub invasion of grassland.