Abstract Araucaria Forest expansion over grassland takes place under wet climate conditions and low disturbance and it is hypothesized that isolated trees established on grassland facilitate the establishment of forest woody species beneath their canopies. Forest with Araucaria angustifolia is a particular type of Brazilian Atlantic Forest and the main forest type on the highland plateau in south Brazil, often forming mosaics with natural Campos grassland. The objectives of this paper were to evaluate the role of isolated shrubs and trees as colonization sites for seedlings of Araucaria Forest woody species on grassland, to determine which species function as preferential nurse plants in the process and the importance of vertebrate diaspore dispersal on the structure of seedling communities beneath nurse plants. The study was conducted in São Francisco de Paula, Rio Grande do Sul State, where we sampled isolated shrubs and trees in natural grassland near Araucaria Forest edges. Seedlings were counted and identified, and seedling diaspore dispersal syndromes, size and colour were registered. We detected 11 woody species with a potential role in nucleating grassland colonization by forest species. Beneath the canopies of nurse plants more forest species seedlings were found compared with open field grassland and the seedlings had diaspores mostly dispersed by vertebrates. Also, more seedlings were found under the canopy of A. angustifolia than beneath other nurse plant species. We conclude that A. angustifolia trees established on grassland act as nurse plants, by attracting disperser birds that promote colonization of the site by other forest species seedlings, and that under low level of grassland disturbance, conservation of frugivorous vertebrate assemblages may increase forest expansion over natural grassland and also facilitate the regeneration of degraded forest areas.