In an East African savanna herbaceous layer productivity and species composition were studied around Acacia tortilis trees of three different age classes, as well as around dead trees and in open grassland patches. The effects of trees on nutrient, light and water availability were measured to obtain an insight into which resources determine changes in productivity and composition of the herbaceous layer. Soil nutrient availability increased with tree age and size and was lowest in open grassland and highest under dead trees. The lower N:P ratios of grasses from open grassland compared to grasses from under trees suggested that productivity in open grassland was limited by nitrogen, while under trees the limiting nutrient was probably P. N:P ratios of grasses growing under bushes and small trees were intermediate between large trees and open grassland indicating that the understorey of Acacia trees seemed to change gradually from a N-limited to a P-limited vegetation. Soil moisture contents were lower under than those outside of canopies of large Acacia trees suggesting that water competition between trees and grasses was important. Species composition of the herbaceous layer under Acacia trees was completely different from the vegetation in open grassland. Also the vegetation under bushes of Acacia tortilis was different from both open grassland and the understorey of large trees. The main factor causing differences in species composition was probably nutrient availability because species compositions were similar for stands of similar soil nutrient concentrations even when light and water availability was different. Changes in species composition did not result in differences in above-ground biomass, which was remarkably similar under different sized trees and in open grassland. The only exception was around dead trees where herbaceous plant production was 60% higher than under living trees. The results suggest that herbaceous layer productivity did not increase under trees by a higher soil nutrient availability, probably because grass production was limited by competition for water. This was consistent with the high plant production around dead trees because when trees die, water competition disappears but the high soil nutrient availability remains. Hence, in addition to tree soil nutrient enrichment, below-ground competition for water appears to be an important process regulating tree-grass interactions in semi-arid savanna.