We found stronger effects of herbivores and canopy conditions (patch size and distance from the canopy edge) at the drier shrubland. There, herbivores reached higher densities and caused higher mortality at open places particularly close to small shrub patches. When protected from herbivores, seedling survival increased under shade. Interestingly though, survival peaked at 2-m distance from the edge decreasing further into the middle and large shrub patches. Under moister conditions (site or year), canopy size and distance effects became less important. Stomatal conductance and photosynthetic capacity closely resembled these patterns indicating that seedling survival was strongly linked to physiological performance under different water and light availabilities. Natural regeneration was found only at the moister site, mostly at shady places close to the canopy edge of small and medium shrub patches. Our results demonstrate a switch in the net effect of facilitative interactions that depends on overall moisture conditions. This switch produces a humped-shaped response curve with a peak in facilitative effects towards intermediate moisture conditions. Our results have important implications for restoration ecology of these semiarid ecosystems. We suggest the combination of herbivore exclusion and the use of nurse plants to facilitate restoration of drier shrublands. Larger chances of success should be close to the canopy edge of existing shrubs. Under moister conditions (years or sites), herbivore protection may be enough.