The nearly complete displacement of native grasses and forbs by Mediterranean annual grasses in California is one of the most spectacular examples of a biological invasion.  Several hypotheses to explain the dominance of exotic annual grasses over native California species exist, including that i) exotic annuals are simply better resource competitors than native annuals and ii) exotic annuals are better adapted to cattle grazing.  To distinguish between these possibilities, we performed a field experiment in Southern California in which we quantified resource uptake (light, water, nitrogen) and the effect of grazing on six exotic and five native annual plant species growing in monocultures and mixtures.  We found that the dominance of exotic grasses over native annual grasses and forbs is driven by both grazing and resource competition.   Exotic annual grasses were better nitrogen competitors than native grasses, perhaps because their phenology is more closely cued to the Mediterranean climate than are the native grasses.  Exotic annual grasses were not better nitrogen competitors than native forbs. However, native forbs were much more negatively impacted by cattle grazing than were any of the grass species.  Our results suggest that both competitive interactions and a novel disturbance regime contributes to the current dominance of exotic annual grasses in California landscapes.