There is growing interest in the addition of carbon (C) as sucrose or sawdust to the soil as a tool to reduce plant-available nitrogen (N) and alter competitive interactions among species. The hypothesis that C addition changes N availability and thereby changes competitive dynamics between natives and exotics was tested in a California grassland that had experienced N enrichment. Sawdust (1.2 kg/m) was added to plots containing various combinations of three native perennial bunchgrasses, exotic perennial grasses, and exotic annual grasses. Sawdust addition resulted in higher microbial biomass N, lower rates of net N mineralization and net nitrification, and higher concentrations of extractable soil ammonium in the soil. In the first year sawdust addition decreased the degree to which exotic annuals competitively suppressed the seedlings of Nassella pulchra and, to a lesser extent, Festuca rubra, both native grasses. However there was no evidence of reduced growth of exotic grasses in sawdust-amended plots. Sawdust addition did not influence interactions between the natives and exotic perennial grasses. In the second year, however, sawdust addition did not affect the interactions between the natives and either group of exotic grasses. In fact, the native perennial grasses that survived the first year of competition with annual grasses significantly reduced the aboveground productivity of annual grasses even without sawdust addition. These results suggest that the addition of sawdust as a tool in the restoration of native species in our system provided no significant benefit to natives over a 2-year period.