Over the last century, many grasslands worldwide have transitioned from a graminoid to a tree/shrub-dominated state in a short period of time, a phenomenon referred to as woody encroachment. Positive feedbacks and bi-stability are thought to be important drivers of woody encroachment, but there is little empirical evidence to suggest that positive feedbacks accelerate the woody encroachment of mesic grasslands. In mesic tallgrass prairie, shrub establishment does not directly facilitate seedling establishment. Yet, shrub establishment may facilitate the clonal spread of existing shrubs into nearby patches, because clonal reproduction might circumvent barriers that typically limit woody seedlings. Our results show that when Cornus drummondii (the predominate encroacher of mesic tallgrass prairie) extends rhizomatous stems into open grasslands, these stems use the same deep soil water sources as mature stems—thereby avoiding competition with grasses and gaining access to a reliable water source. In addition, herbaceous fuel concentrations are lower at the shrub/grass interface than in open grasslands, reducing the potential impacts of subsequent grassland fires. We propose that the release from resource and fire limitation results in a positive feedback loop as clonal stems are able to extend into surrounding patches, circumvent demographic barriers, mature, and spread by developing their own clonal stems. Long-term data on site (26 years) corroborates this interpretation: the size of deep-rooted clonal shrub species has increased 16-fold and their cover has increased from 0 to 27%, whereas the cover of shallow-rooted species (both clonal and non-clonal) has only increased marginally. Together, these results suggest that (1) positive feedbacks can facilitate mesic woody encroachment and (2) bi-stability exists in mesic tallgrass prairie.