Many herbaceous species in dynamic ecosystems rely on soil propagule banks for recruitment, but the specific spatio-temporal dynamics of this process remain poorly known.  Soil manipulation, in conjunction with analysis of life history traits of seed-banking species, can increase our understanding of the role of propagule banks in riparian plant community dynamics.  Along a free-flowing perennial, dryland river, we investigated the vertical zonation of propagules within floodplain soils, determined the life history traits of the propagule bank species, and then manipulated surface soils in Prosopis floodplain forests to determine effects on composition of the herbaceous understory. Using set criteria, we classified 33% of 84 propagule bank species as having long-term persistent seeds, 18% as having transient seeds, and 17% as having persistent seeds, with the remainder having indeterminate longevity. The transient seed group consisted predominantly of large-seeded, upland (xeric) annuals, and were confined to surface soil layers. The long-term persistent group consisted predominantly of small-seeded wetland (hydric) species and were located in deeper depths.  The transient-seeded upland annuals (many of which are Mediterranean grasses) are the dominant understory species on the high floodplain surfaces.  The soil manipulation experiment in Prosopis forests found that removal of surface soils and litter caused a sharp reduction in the transient-seeded upland annuals, followed by germination of a mix of upland species and some wetland species.  While wetland species would not survive the current conditions, as the channel migrates across the floodplain and as sediments are eroded during flood events, conditions may become more favorable for the wetland species.