A trend of increasing woody plant density, or woody thickening, has been observed across grassland and woodland ecosystems globally. It has been proposed that increasing atmospheric [CO2] is a major driver of broad scale woody thickening, though few field-based experiments have tested this hypothesis. Our study utilises a Free Air CO2 Enrichment experiment to examine the effect of elevated [CO2] (eCO2) on three mechanisms that can cause woody thickening, namely (i) woody plant recruitment, (ii) seedling growth, and (iii) post-disturbance resprouting. The study took place in a eucalypt-dominated temperate grassy woodland. Annual assessments show that juvenile woody plant recruitment occurred over the first 3 years of CO2 fumigation, though eCO2 did not affect rates of recruitment. Manipulative experiments were established to examine the effect of eCO2 on above-ground seedling growth using transplanted Eucalyptus tereticornis (Myrtaceae) and Hakea sericea (Proteaceae) seedlings. There was no positive effect of eCO2 on biomass of either species following 12 months of exposure to treatments. Lignotubers (i.e., resprouting organs) of harvested E. tereticornis seedlings that were retained in situ for an additional year were used to examine resprouting response. The likelihood of resprouting and biomass of resprouts increased with lignotuber volume, which was not itself affected by eCO2. The presence of herbaceous competitors and defoliation by invertebrates and pathogens were found to greatly reduce growth and/or resprouting response of seedlings. Our findings do not support the hypothesis that future increases in atmospheric [CO2] will, by itself, promote woody plant recruitment in eucalypt-dominated temperate grassy woodlands.