The impacts of climate change can be profound in many ecosystems worldwide, including drylands such as arid and semi-arid scrublands and grasslands. Foundation plants such as shrubs can provide microclimatic refuges for a variety of taxa. These shrubs can directly influence micro6 environmental measures, and indirectly increase the local environmental heterogeneity as a result. We examined the hypothesis that, in comparison to an open gap, foundation shrubs improve the microclimate beneath their canopy and that microclimate is in turn a significant predictor of annual vegetation. The following predictions were made: 1) mean air temperature (NSAT), ground temperature (SGT), and vapour pressure deficit (VPD) will be significantly lower under the shrubs than in the open microsites; 2) shrub canopy size predicts microclimate; 3) site-level aridity estimates and percent shrub cover influence annual plant abundance and richness; and 4) the site13 level mean of NSAT and VPD predict annual plant abundance and richness. Our study took place in Southwestern California, U.S.A. We used a handheld device with a probe to measure microclimatic variables such as near-surface air temperature (NSAT), near-surface relative humidity (NSRH), and surface ground temperature (SGT) at the shrub species Ephedra californica and in the open gap, across six sites in California, United States. Air temperature and RH were then used to calculate VPD. The mean number of vascular plant species across each site was also recorded. Only SGT was significantly reduced under shrub canopies. Canopy volume was not a significant predictor of all three microclimatic variables, demonstrating that even small, low-stature shrubs can have facilitative effects. Furthermore, total shrub cover and aridity at sites significantly predicted mean plant richness and abundance. There were significantly more plants associated with shrubs and there were significantly more species associated with the open. Mean air temperature and VPD at the site-level significantly predicted vegetation abundance and richness, though microsite-level differences were only significant for richness. Foundation shrubs are a focal point of resiliency in dryland ecosystems. Understanding their impact on microclimate can inform us of better management, conservation, and restoration frameworks.