Container-grown Douglas-fir seedlings were planted in 1978 in a western redcedar/myrtle pachistima habitat type. Planting was followed by an orchard grass/timothy/red clover treatment seeded at a rate of 28 kg/ha. Douglas-fir water potential () and growth rate were (1) compared between grass-seeded and unseeded sites and (2) correlated to aboveground biomass in 1979 and 1980. In 1979, both predawn and midday were significantly reduced by the grass treatment after a month with less than 12 mm of rain. No significant differences were detected in 1980. Seeding grass on certain sites caused significant reductions in Douglas-fir diameter, shoot growth, and seedling heights. Canonical correlation was used to relate standing biomass of vegetation within 18 cm of a Douglas-fir seedling to its and growth parameters. Only grasses and shrubs were associated with increasing Douglas-fir moisture stress. Douglas-fir could not be related to the growth parameters measured. Water is probably not the only limiting factor nor even the primary limiting factor in regard to Douglas-fir seedling competition in the western redcedar/pachistima habitat type. Forest Sci. 29:166-179.