Establishment of forest trees into subalpine grasslands near Mt. Hotham, southeast Australia, was quantified in 1998 across long-established forestgrassland boundaries in belt transects at four sites. Although the grasslands varied in their dominant species and groundlayer biomass, tree encroachment (principally by Eucalyptus paucijlora) occurred at all sites. Tree encroachment is a recent and synchronous event; all invading saplings were :S31-yr-old and the majority (54%) established between 1991 and 1995. Most sapling establishment (66%) occurred within 5 m of the forest-grassland boundary where the number of plants present was positively associated with the amount of overhanging tree cover at three of the four sites. No correlation between encroachment and groundcover type or biomass, however, was found at any site. Some of the recently established plants are now small trees (1-8 m in height) and have become reproductive, indicating that establishment in grasslands is successful, making ecotone shifts possible. Any changes in boundary position, however, will be slow given the limited distance that trees established from the forest edge. Tree encroachment near Mt. Hotham is likely the outcome of small-scale (e.g., regeneration microsite) and landscape-scale (e.g., climate, grazing) processes that require further clarification.