The increase of woody plant cover in former pasturelands and savannas is considered one of the major components of global environmental change. Examples of shrub encroachment have been reported over much of the world¿s arid and semi-arid regions. In scattered tree systems, as the dehesa of the Iberian Peninsula, the increase of shrub cover has been associated to the abandonment of traditional management practices. In this system, where the scarcity of resources is a major determinant for plant functioning, the consequences of the increases of shrub cover are controversial and still not well known. Several studies have described that shrubs can compromise the productivity and diversity of pastures as well as the physiological activity of trees as they encroach into grasslands or savannas. On the other hand the presence of shrubs has been shown to play a central role for the regeneration of trees in Mediterranean systems and so that it has been proposed as a cost-effective tool to restore degraded or threatened environments. In this context, it is of great interest to ascertain comprehensively the effect of shrubs on the functioning of the neighboring vegetation, bearing in mind that the interactions for soil resources may play a crucial role.The aim of the present study was to analyze the effect of the presence of a woody understory on the functioning and persistence of Mediterranean open oak woodlands. We study the effect of two contrasting, in terms of morphological traits and reproductive strategy, shrub species: Retama spahaerocapa (a deep rooted shrub) and Citus ladanifer (a shallow rooted shrub), in order to account for specie-specific effects, on neighboring vegetation (tree and pasture). Pasture and tree rooting profile, soil resources availability (water and nutrients), tree and pasture production, tree physiological status and tree regeneration were assessed with and without the presence of shrubs. The results showed that the presence of shrubs deeply modify tree and pasture root systems. Trees growing either with Cistus or Retama exhibited a significantly deeper rooting profile than growing without competition, whereas herbaceous species showed the opposite trend, shifting most of their roots upwards to shallower soil horizons. Cistus appeared to be a great competitor for soil resources (soil nutrients and water). The negative effect of Cistus on soil resources led to a significantly lower tree leaf water potential, leaf gas exchange parameters, acorn production and growth. Cistus encroachment also reduced pasture yield by 68 to 98 %. On the other hand, Retama ameliorated top soil fertility and showed positive effect on SWC in sites with deep soils. Retama increased significantly pasture yield by 11 to 157 % and tree growth by 6 to 13 %, but had a neutral to negative effect on acorn yield. Both shrub showed a similar positive effect on tree seedling emergence in spring and survivorship after summer. However, as seedling aged, this positive association strengthened with Retama, whereas this association weakened over time with Cistus. To sum up, shrubs have the potential to modify the functioning and persistence of Mediterranean open oak woodlands. It has been demonstrated that different shrub species can induce opposite outcomes. Thus, future management practices must bear in mind this specificity of effects and try to optimize the positive effect of shrubs without jeopardizing the productivity or functioning of the system. This results open new possibilities of research to further investigate the processes involve in plant-to-plant interactions in plant assemblages of Mediterranean open oak woodlands