By using historical records, aerial photography and dendroecological methods, we assessed the vegetation changes that have occurred in a grassy-woodland landscape at Inverleigh, Victoria, since 1850. Land managers have perceived that encroachment by native shrubs such as Acacia paradoxa DC. has occurred in woodlands in the area after their reservation for conservation following a long period of stock grazing, but data are needed to place these recent changes in context. The vegetation has passed through three management phases since early European settlement and these have contributed to the present vegetation patterns. The area was (1) initially set aside as a timber reserve at the time of European settlement and was periodically grazed by stock. (2) Logging, plantation forestry and stock grazing regimes caused large-scale disturbances to the understorey vegetation during the early 1900s and continued to the 1980s. In the 1970s, disturbances caused by recreational activities intensified the vegetation modification. During this time, the vegetation changed from an open woodland to denser, shrubbier woodland. Most soil disturbances ceased when (3) the area was declared a flora reserve in 1988. Evidence suggests that with the cessation of these disturbances, populations of the native shrub Acacia paradoxa increased dramatically, reducing the tree-gap area significantly. The major increase occurred from 1974 to 2002 when the area of tree gap declined by 38%. Age-class analyses suggested that most (>80%) of the A. paradoxa population is less than 25 years old, but plants may be able to live beyond 60 years. Logistic regression modelling suggested that distance to closest track influences present-day A. paradoxa distribution, as does soil moisture. This suggests that the soil disturbance from grading tracks and vehicle movements may be facilitating both the spread and initial establishment of A. paradoxa, particularly on soils of higher soil-moisture holding capacity. Strategies for future woodland management must consider how the current vegetation dynamics reflect past land-use history, and land managers must choose appropriate goals for biodiversity conservation in the light of these changes.