Clearance of Eucalyptus woodlands has resulted in soil deterioration and lost agricultural production, due to wind erosion, salinity and soil acidity. Despite increasing efforts to reverse these trends through Landcare and other revegetation and agroforestry programs, there is a lack of experimentally-based information about the effects of trees on native pasture performance. The study was carried out in a temperate environment (Southern Tablelands, New South Wales). The altitude at the study sites ranged from 740 to 880m and the aspect at the experimental plots varied from SE to SW. The nearest site was 16 km from Canberra Airport and all sites were situated within similar rainfall isohyets as Canberra Airport. Thus climatic conditions were expected to be similar. Climate records at Canberra Airport indicate that January is the hottest month with mean maximum temperature of 27.7 �C and July is the coldest month with a maximum of 11.1 �C. Rainfall in the area ranges from 37.5 to 66.0 mm monthly average in June and October respectively. The main tree species in the study area were Eucalyptus pauciflora, E. melliodora and E. mannifera. Furthermore, Poa labillardieri, P. sieberiana, Themeda australis, Danthonia penicillata and Microlaena stipoides were the most abundant pasture species on the experimental plots. Species of clover (Trifolium spp.) were also abundant among the herbs. This study used pasture assessment techniques to quantify the effects of remnant patches of Eucalyptus open woodlands on the composition, quality and biomass production of herbaceous understorey vegetation. Microclimate and soil nutrients were also compared under trees and in the open. In addition, consumption by vertebrate grazers under Eucalyptus trees and in the open was compared. Tree density and basal area were compared with herbage standing crop. Remnant patches of Eucalyptus open woodlands modify the microclimate by reducing wind reaching the understorey vegetation. However no significant effects on ambient air temperature and relative humidity were recorded. The effect of trees on soil moisture was contingent to differences between the four sites and soil depth. Despite a 13% higher soil organic matter in the top 15 cm of soil under trees, soil total nitrogen and total phosphorus did not differ from that in the open. Surface soil pH values were lower (by 0.2 units) under the trees. No significant effect of trees on pasture species richness was found. However the classification of quadrats on the basis of species presence showed a distinction between species composition under trees and in the open at one of the four sites. vi The contribution of pasture species to total dry weight on plots under trees and in the open did depend on the particular species involved and was also contingent to differences between sites. However at the sites where Vulpia bromoides and Poa sieberiana were abundant, the two species dominated the biomass under trees. Whereas Microlaena stipoides var. stipoides dominated the biomass under trees at two sites and in the open at only one of the four sites. Pasture total N content differed between sites. Two of the sites had significantly higher (5.9% and 19.7%) N content under trees. On the contrary, pastures at one site contained 18.7% higher N content in the open. The total P content was 18% higher in pastures under trees. Overall, the pasture standing crop under trees was 15% less than in the open during August to May. Vertebrate grazers consumed about the same amount of pasture under the trees and in the open at the four experimental sites.