We studied how leaf litter, water and fungal pathogens affect the establishment, survivorship, and growth of Eucalyptus obliqua using glasshouse and field experiments. In a glasshouse experiment, the presence of leaf litter of E. obliqua increased the establishment of seedlings when the seeds were placed beneath the litter, but dense litter layers reduced seedling emergence when seeds were placed on top. Results from a complementary experiment suggest that the effect of litter may be mediated by the high humidity microenvironment it creates, which may enhance imbibition of unburied seeds. In another glasshouse experiment, litter in combination with excessive water applications reduced seedling emergence and increased seedling mortality, but the addition of fungicide reverted these effects. Litter with lower water application or fungicide added increased seedling emergence. In all cases higher biomass in seedlings growing in litter treatments was associated with earlier emergence. In two recently burnt sites, the density of seedlings of E. obliqua was positively correlated to the presence of litter. Experimental addition of litter in the field reduced soil temperature during the summer, and together with watering, increased soil water content, and the water potential of established seedlings. However, neither treatment had any positive effect on their growth or survivorship. On the contrary, litter addition reduced the height and number of leaves, probably as a result of increased herbivory. We conclude that in Mediterranean-type systems litter may produce various effects on seedling establishment depending on their developmental stage, and the season.