This study investigated the impacts of livestock grazing on native plant species cover, litter cover, soil surface condition, surface soil physical and chemical properties, surface soil hydrology, and near ground and soil microclimate in remnant Eucalyptus salmonophloia F. Muell woodlands. Vegetation and soil surveys were undertaken in three woodlands with a history of regular grazing and in three woodlands with a history of little or no grazing. Livestock grazing was associated with a decline in native perennial cover and an increase in exotic annual cover, reduced litter cover, reduced soil cryptogam cover, loss of surface soil microtopography, increased erosion, changes in the concentrations of soil nutrients, degradation of surface soil structure, reduced soil water infiltration rates and changes in near ground and soil microclimate. The results suggest that livestock grazing changes woodland conditions and disrupts the resource regulatory processes that maintain the natural biological array in E. salmonophloia woodlands. Consequently the conditions and resources in many remnant woodlands may be above or below critical thresholds for many species. The implications of these findings for restoration of plant species diversity and community structure are discussed. Simply removing livestock from degraded woodlands is unlikely to result in the restoration of plant species diversity and community structure. Restoration will require strategies that capture resources, increase their retention and improve microclimate.