We used a combination of surveys of natural vegetation and seed-sowing and seedling transplant experiments to determine the relative importance of competition and microenvironmental modification as mechanisms by which understory vegetation influences the establishment of tree seedlings in an Alaskan postfire boreal forest. Seedlings of white spruce (Picea glauca) and paper birch (Betula papyrifera) became established more frequently than expected in patches that were dominated by horsetail (Equisetum arvense) and less frequently in patches of bluestem (Calamagrostis canadensis) and other vegetation. Similarly, birch and spruce, whether sown directly or transplanted as seedlings into horsetail-dominated patches generally showed greater survivorship, growth and nitrogen accumulation (for birch only) than did those transplanted into bluestem or quaking aspen (Populus tremuloides) patches. Clipping experiments demonstrated that the presence of aboveground vegetation reduced survivorship (for birch only), growth (for both species), and nitrogen accumulation (for spruce only) in all patch types. Thus, the understory vegetation in all patch types competed with tree seedlings. However, patch x clipping interactions were either absent or could not explain the greater inhibition of seedling establishment by bluestem or aspen than by horsetail. The strong inhibitory effect of bluestem and aspen on the establishment of spruce and birch seedlings is best explained by the unfavorable temperature and moisture microenvironments in these patches, rather than by different competition in patches of bluestem, horsetail, or aspen. Many asymmetrical species interactions that are thought to drive successional change may result more from the contrasting effects that species have on their environment than from resource competition among species.