When crested wheatgrass (Agropyron desertorum) grows in mixture with sagebrush (Artemisia tridentata), its production declines. Its production increases when grown in mixture with fourwing saltbush (Atriplex canescens), according to previous reports. This study investigated soil water extraction and potassium (K) nutrition of the two shrubs to identify possible causes of the differential responses of crested wheatgrass. Crested wheatgrass had reduced, rather than increased, nitrogen (N) and K yield in mixture with fourwing saltbush. No differences in N and phosphorous (P) concentrations were observed between sagebrush and fourwing saltbush, but fourwing saltbush had a much higher K concentration and returned nearly twice as much K to the soil as sagebrush by throughfall and litterfall. Throughfall additions were much greater than those from litterfall. AK-fertilization/water-stress, two-factor greenhouse experiment was conducted with crested wheatgrass. High- and medium-K-fertilization treatments had highest tissue K concentration, but biomass yield was reduced in waterstressed plants with high K-fertilization. A difference of 1.56 MPa in osmotic adjustment was observed between waterstressed plants with high K-fertilization and irrigated, low-K-fertilization plants. These results suggest that K accumulation in fourwing saltbush may be a factor for enhanced crested wheatgrass productivity. Crested wheatgrass grown in mixture with fourwing saltbush had lowered predawn and mid-day xylem water potentials compared with monoculture and sagebrush mixture plots, but no other treatment differences were observed for any species. Fourwing saltbush monoculture plots had the most uniform water extraction rates and may compete less for water than sagebrush when crested wheatgrass extraction rates are highest.