Growth and survival of Acacia tortilis, Calligonum polygonoides and Prosopis juliflora were studied in relation to habitat conditions and competitive effect of Dactyloctenium sindicum. Six different habitats viz. bare dune plantation (BP), semistabilized dune plantation (SP), flat land plantation (FL), flat land with Dactyloctenium sindicum grass (FG), flatland without vegetation (FW) and bare dune (BD) were identified on the basis of microtopography and abundance of D. sindicum. Total plant biomass (above ground and root) and soil water content was recorded. Absolute and relative growth reductions of tree seedlings were calculated for two successive years during 1996-97 and 1997-98. The grass biomass was 438 g m-2 in FG but decreased to 369 g m-2 in SP habitat. The soil water content varied from 10.2 to 23.7 mm across the habitats. D. sindicum utilised soil water efficiently through its exhaustive root system (56% of total grass biomass). The reduction in height and crown diameter of tree seedlings was 18% to 58% due to varying density of D. sindicum. Growth of tree seedlings varied due to habitat conditions and tree species. A. tortilis seems to tolerate the competitive effect of the D. sindicum on all the habitats. P. juliflora showed optimum growth on the bare dune.