Ant-plant protection symbioses, in which plants provide food and/or shelter for ants in exchange for protection from herbivory, are model systems for understanding the ecology of mutualism. While interactions between ants, host plants, and herbivores have been intensively studied, we know little about how plant-plant interactions influence the dynamics of these mutualisms, despite strong evidence that plants compete for resources, that hosting ants can be costly, and that host-plant provisioning to ants can therefore be constrained by resource availability. We used field experiments in a semiarid Kenyan savanna to examine interactions between the ant-plant Acacia drepanolobium, neighboring grasses, and two species of symbiotic acacia-ants with divergent behaviors: Crematogaster mimosae, an aggressive symbiont that imposes high costs to host trees via consumption of extrafloral nectar, and Tetraponera penzigi, a less-protective symbiont that imposes lower costs because it does not consume nectar. We hypothesized that by competing with acacias for resources, neighboring grasses (1) reduce hosts' ability to support costly C. mimosae, while having little or no effect on the ability of hosts to support low-cost T. penzigi, and (2) reduce sapling growth rates irrespective of ant occupant. We factorially manipulated the presence/absence of grasses and the identity of ant occupants on saplings and evaluated effects on colony survivorship and sapling growth rates over 40 weeks. Contrary to prediction, the high-cost/high-reward nectar-dependent mutualist C. mimosae had higher colony-survival rates on saplings with grass neighbors present. Grasses appear to have indirectly facilitated the survival of C. mimosae by reducing water stress on host plants; soils under saplings shaded by grasses had higher moisture content, and these saplings produced more active nectaries than grass-removal saplings. Consistent with prediction, survival of low-cost/low-reward T. penzigi did not differ significantly between grass-removal treatments. Saplings occupied by low-cost/low-reward T. penzigi grew 100% more on average than saplings occupied by high-cost/high-reward C. mimosae, demonstrating that mutualist-partner identity strongly and differentially influences demographic rates of young plants. In contrast, contrary to prediction, grass neighbors had no significant net impact on sapling growth rates. Our results suggest that neighboring plants can exert strong and counterintuitive effects on ant-plant protection symbioses, highlighting the need to integrate plant-plant interactions into our understanding of these mutualisms.