Nitrogen enrichment may play a role in successful invasion of indigenous South African mediterranean shrublands by alien invasive annual grasses. To test the hypothesis that an increase in nitrogen would result in a greater increase in biomass for an alien annual grass than for various indigenous plant functional groups, we conducted a field study in Western Cape Renosterveld shrubland fragments, surrounded by wheat or vinyards, to assess alien grass abundance in relation to soil nitrogen availability. Significant decreases in invasive annual grass Avena fatua cover and soil nitrogen were observed from the edges to the interior of Renosterveld habitat fragments and there was a significant positive relationship between Avena fatua cover and soil nitrogen. In addition, Avena fatua was grown in competition with three indigenous species of different functional types, an annual forb (Dimorphotheca pluvialis), a geophyte (Oxalis purpurea) and an indigenous perennial grass (Tribolium uniolae) at three concentrations of soil nitrogen in a pot experiment. Results revealed that the alien grass Avena fatua had significant increases in biomass when nitrogen was added, whereas the indigenous species did not. Alien grass competition significantly influenced performance of the annual forb and the indigenous grass but did not affect the geophyte. Results suggest the prioritization of hierarchical management options for the different functional groups in Renosterveld in response to invasive grasses. Nutrient enrichment through run off must be restricted to conserve remnant Renosterveld fragments.