Anthropogenic activity has caused persistent and prominent losses of forest cover in dry tropical forests. Natural regeneration of forest trees in grazed areas often fails due to lack of seed sources and consumption by ungulates. To address this, the effective restoration of such sites often requires fencing and outplanting nursery-grown seedlings. In the degraded, dry forests of tropical Hawaii, USA, an additional challenge to restoration of native forest trees is the introduced kikuyu grass (Cenchrus clandestinus). This invasive, rapidly growing rhizomatous plant forms deep, dense mats. We studied the use of nursery cultural techniques to facilitate the establishment of koa (Acacia koa) seedlings outplanted amidst well-established kikuyu grass on a volcanic cinder cone on the dry, western side of Hawaii Island. Seedlings were grown four months in three container sizes (49, 164, 656 cm3) and with four rates (0, 4.8, 7.2, and 9.6 kg m−3) of 15–9–12 (NPK) controlled-release fertilizer incorporated into media prior to sowing. After 16 months in the field, seedling survival was > 80% for all treatments with two exceptions: the non-fertilized 49 cm3 (78%) and 164 cm3 (24%) containers. After 10 years, only these two treatments had significantly lower survival (35% and 10%, respectively) than the other treatments. One year following planting, none of the non-fertilized seedlings had transitioned to phyllodes from juvenile true leaves, regardless of container size. For the fertilized 656 cm3 container treatment, 78%–85% of seedlings had phyllodes, with mean values increasing by fertilizer rate. Phyllodes are known to confer greater drought resistance than true leaves in koa, which may help to explain the improved survival of fertilized trees on this relatively dry site. Overall, nursery fertilization was more influential on seedling height and diameter response than container size after outplanting. However, the largest container (656 cm3) with the addition of fertilizer, produced significantly larger trees than all other treatments during the early regeneration phase; early growth differences tended to fade at 10 years due to inter-tree canopy competition. Although koa is able to fix atmospheric nitrogen through rhizobium associations, our data confirm the importance of nursery fertilization in promoting regeneration establishment. Nursery cultural techniques may play an important role in forest restoration of dry tropical sites invaded by exotic vegetation.