Agricultural intensification has led to the dramatic decline of buloke (Allocasuarina luehmannii) and the plant communities it dominates in southern Australia. Conservation of remnant buloke woodlands and revegetation of agricultural land are both required for the persistence and improved ecological function of this threatened community. We examined the effect of proximity of mature buloke trees on early sapling survival, to provide guidelines for revegetation aimed at enhancing degraded remnants. We planted buloke saplings at different distances from the base of remnant mature trees at a site in western Wimmera, Victoria, with and without herbaceous competition. Mature buloke trees altered most soil nutrients (positively), soil water content (negatively) and soil conductivity (positively) at different gradients from the tree base, depending on the factor measured. Mature buloke trees had a strong negative effect on conspecific sapling survival in the first summer after planting in both the presence and absence of an herbaceous understorey, possibly because of the strong effect of trees on soil moisture. Competition from mature buloke was high nearest to the trees (up to 9 m from tree base), but competition from the native understorey also appeared important for saplings in the tree gaps, as evidenced by their improved survival when the understorey was removed. We suggest that to establish buloke saplings in areas where mature trees already occur (i.e. enhancement plantings around isolated paddock trees), planting tubestock outside the canopy of mature buloke is necessary to enhance establishment success.