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Most arid and semiarid ecosystems around the world have been grazed by domestic herbivores. In many cases, grazing has degraded vegetation and soil. The possibility of restoring rangeland’s good condition depends, partially, on the ability of remaining populations of desirable species to recover. In this work, we studied the exact spatial distribution of remaining palatable adult plants in fields with different grazing history (i.e., seed sources) and quantified the effect of interspecific competition with less palatable grasses on seedling emergence and survival (i.e., regeneration constraints). We worked in a Patagonian steppe composed of shrubs and perennial tussock grasses that has been grazed by sheep for >100 years. In order to evaluate the location of seed sources, we mapped the location of a palatable species (Bromus pictus Hook.) in paddocks with different long-term grazing intensity. In addition, we sowed seeds of B. pictus close to 2 dominant, less palatable grasses in 2 different years to evaluate the role of interspecific interactions on regeneration and the effects of climate variability. The proportion of B. pictus plants growing in protected places near less palatable species significantly increased with grazing intensity. Competition effects on emergence, survival, and growth depended on the year’s moisture regime. During the dry year, competition with less palatable grasses reduced the emergence, survival, height, and number of leaves of palatable grass seedlings by 30%, 55%, 48%, and 40%, respectively. In the wet year, there were no effects of competition on emergence and height, and the effects on survival depended on the species of the less palatable neighbors. Our study supports the idea that management for recovering degraded rangelands in this ecosystem may benefit from considering the spatial distribution of remaining plants. It also indicates that the susceptibility of demographic processes to interspecific competition depends on the year and neighbor species.   The Rangeland Ecology & Management archives are made available by the Society for Range Management and the University of Arizona Libraries. Contact lbry-journals@email.arizona.edu for further information. Migrated from OJS platform August 2020 Legacy DOIs that must be preserved: 10.2458/azu_rangelands_v58i4_aguiar