Invasion by exotic species is a major threat to global diversity. The invasion of native perennial grasslands in California by annual species from the southern Mediterranean region is one of the most dramatic invasions worldwide. As a result of this invasion, native species are often restricted to low-fertility, marginal habitat. An understanding of the mechanisms that prevent the recolonization of the more fertile sites by native species is critical to determining the prospects for conservation and restoration of the native flora. We present the results of a five-year experiment in which we used seeding, burning, and mowing treatments to investigate the mechanisms that constrain native annuals to the marginal habitat of a Californian serpentine grassland. The abundance and richness of native species declined with increasing soil fertility, and there was no effect of burning or mowing on native abundance or richness in the absence of seeding. We found that native annual forbs were strongly seed limited; a single seeding increased abundance of native forbs even in the presence of high densities of exotic species, and this effect was generally discernable after four years. These results suggest that current levels of dominance by exotic species are not simply the result of direct competitive interactions, and that seeding of native species is necessary and may be sufficient to create viable populations of native annual species in areas that are currently dominated by exotic species.