1 We hypothesized that the role of positive plant–plant interactions will increase with the environmental stress imposed by long-term pollution. We studied the effects of top-canopy plants on two deciduous (Vaccinium myrtillus, V. uliginosum) and two evergreen (V. vitis-idaea, Empetrum nigrum ssp. hermaphroditum) dwarf shrubs by comparing their growth and reproduction under trees and in gaps in industrial barrens and in unpolluted forests in the Kola Peninsula (NW Russia). 2 Interactions between habitat type and tree proximity on berry yield and reproductive effort were significant for four species combined. In forest habitats both berry yield and reproductive effort were higher in dwarf shrub patches growing in gaps than under tree canopies, but in barren habitats Vaccinium species reproduced better under tree canopies. 3 The interaction of habitat type and tree proximity was also significant for vegetative biomass, mostly due to evergreen species benefiting from neighbouring trees in barren habitats. 4 Overall, all four dwarf shrub species reproduced better in barren habitats than in forests, mostly due to increased reproduction observed under tree canopies in barren sites. 5 Values of the relative neighbour effect indicated that the impact of top-canopy plants on dwarf shrubs shifted from negative in forest habitats to generally positive in barren habitats.