The allelopathic effects of the invasive Prosopis juliflora (Sw.) DC. was studied on seed germination and seedling growth of Acacia nilotica (L.) Willd. ex Del., Acacia tortilis (Forssk.) Hayne, Cenchrus ciliaris L. and Enteropogon rupestris (J.A. Schmidt) A. Chev. Vegetation sampling in different habitat types in the area was made to identify the target plant species. Comparison of canopy characteristics among P. juliflora, A. nilotica and A. tortilis was also made to observe differences if any in canopy closure. P. juliflora was recorded in all habitat types in highest density and observed affecting the plant diversity there in. Its growth characteristics and dense thicket formation restrict light to the ground flora and hence diminishes plant diversity. Leaf, bark and root aqueous extract of P. juliflora at 0, 0.5, 0.8, 1, 2 and 6% were prepared and their effect studied on germination percentage and seedling growth of the study plant species. Germination of A. nilotica and A. tortilis was not affected by all aqueous extracts of different organ parts of P. juliflora while leaf and root extracts at higher concentrations inhibited germination of C. ciliaris and E. rupestris. Shoot and root growth of the study species were inhibited by leaf and root at higher concentrations. Seed germination of all species except A. nilotica was inhibited by soil amended with decaying plant parts and under canopy soil. The effect is species specific and annuals (grasses and herbs) were affected more than perennials. Leaf seems to contain greater number/ amount of inhibitors than does root and bark. Bark seems to contain the least. Heavy accumulation of toxic substances at under canopy soil of P. juliflora may be one of the reasons for its invasiveness and low plant diversity.