Where plant species vie for limited resources, disturbances might preclude competition by releasing a flush of nutrients, or by reducing biomass and thereby diminishing the consumption of resources. However, if new seedlings colonize in clumps, they may still deplete resources within the local aggregations, which may then reduce their growth and survivorship. We investigated competition among seedlings in a burned area by examining the relationship between the performance of newly established shrub seedlings of Ceanothus impressus and (1) the proximity and (2) the identity of their near neighbors. We also investigated the relationship between neighbor proximity and the availability of water. Both survivorship and growth of C. impressus were positively associated with increasing distance to near neighbors, in a manner consistent with resource competition. The availability of water (as determined by pre-dawn xylem pressure potentials) tended to be greater when neighbors were farther away, providing evidence that water was a resource for which plants were competing. This conclusion is reinforced by the finding that the effects of neighbors were stronger in drought years, suggesting that yearly variation in the availability of an important resource (water) can affect the strength of competitive interactions. This suggests that after disturbances, when some resources are apparently abundant on a large scale, competition may be important in determining the small scale patterns of seedling growth and survival.