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Woody plant encroachment has been widespread in grassland and savanna ecosystems over the past century. This phenomenon jeopardizes grassland biodiversity and threatens the sustainability of pastoral, subsistence, and commercial livestock grazing. When woody species increase in abundance and transform grasslands and savannas into shrublands and woodlands, the potential to alter land surface–atmosphere interactions and carbon and nitrogen sequestration and cycling at regional and global scales may be significant. The La Copita case study documents the rate and magnitude of change in ecosystem biogeochemistry that can occur when a subtropical dryland landscape is transformed from savanna grassland to woodland. Fluctuations in monthly woody plant root biomass in upper soil horizons exceeded foliar litter inputs by one to two orders of magnitude, suggesting that belowground inputs of organic matter drive changes in soil physical and chemical properties subsequent to woody plant establishment in grasslands. These results are of potential global significance, given that large areas of Africa, South America, North America, and Australia have been undergoing similar land cover changes over the past century. The demonstrated capacity for carbon sequestration in this semiarid system suggests a need to reevaluate traditional perspectives on woody plants in rangelands as governments and industries seek ways to mitigate greenhouse gas emissions.