Serpentine barrens of the Mid-Atlantic United States are globally rare, grass-dominated ecosystems thought to exclude C₃ species and characterized by unique soil composition. However, like many grassland ecosystems globally, these sites are presently facing encroachment by surrounding forest. In this ecosystem, the tendril climbing vine, Smilax rotundifolia, forms dense thickets around barrens that typically precede forest encroachment. While numerous factors speculatively initiate and promote encroachment in these systems, few studies have examined photosynthetic responses of serpentine grasses to changes in resource availability initiated by encroachers or physiological ability of encroaching S. rotundifolia to colonize high-light barren environments. We sought to understand both environmental and physiological dynamics of encroachment along an irradiance gradient in these systems. At three serpentine barren sites in southeastern Pennsylvania, physiological responses of the native grasses Sorghastrum nutans and Schizachyrium scoparium to increased shading by S. rotundifolia were examined. Additionally, the physiological performance of S. rotundifolia in the forest understory was compared to that in sunlit barrens environments. Light-saturated photosynthesis (Aₛₐₜ), stomatal conductance (gₛ), instantaneous transpiration efficiency (ITE), maximum efficiency of photosystem II (Fᵥ/Fₘ), midday leaf water potential (ψₗₑₐf) and specific leaf area (SLA) were measured for all species over the course of the 2014 growing season. Two-way analyses of variance were used to assess changes in these parameters across growing environments, as well as seasonally for each species. Multiple regression analyses were also performed to investigate the influence of vapor pressure deficit (D) and leaf temperature (Tₗₑₐf) on Aₛₐₜ and ITE. Light-saturated photosynthesis was significantly greater in S. rotundifolia growing in sun than in the shade (P < 0.001) and early in the season (P = 0.012). Sun S. rotundifolia had up to 27% greater Aₛₐₜ than shaded plants. Even with reduced ψₗₑₐf in the barrens, S. rotundifolia maintained high gₛ though Aₛₐₜ was limited by high D later in the growing season. These data are in agreement with recent research suggesting that plants are not subject to water limitation in Mid-Atlantic barrens. Unexpectedly, shaded grasses at the encroachment interface did not exhibit any significant reduction in Aₛₐₜ. Declines in grass photosynthesis do not likely occur until S. rotundifolia rhizomes transition into monotypic thickets, completely excluding grasses. Encroachment by S. rotundifolia appears to be primarily facilitated by its ability to capitalize on light resources early on in the summer growing season, when environmental conditions are less stressful.