Plant communities and soil properties in many dryland ecosystems have changed dramatically over the past century due to the proliferation of woody plants, caused largely by the introduction of livestock grazing, changes to natural fire regimes, and climate. Areas heavily encroached by shrubs are generally regarded as degraded, and this view is largely based on the fact that shrubs reduce pastoral productivity. There have been many attempts to remove shrubs in pastoral systems using chemical, biological and mechanical techniques to improve pastoral production. It remains unclear, however, whether shrubs per se or the interactions between grazing and climate are responsible for the putative reductions in pastoral productivity in shrub−encroached areas. This thesis examines the long−term ecological effects of mechanical shrub removal by blade−ploughing, with and without grazing, on vegetation and soils in shrub−encroached woodlands in eastern Australia. The results show that the combination of ploughing and grazing creates dramatic effects on soils and vegetation in this dryland system. Chapter 1 provides an overview of shrub encroachment phenomenon, its common association with degradation, as well as the benefits of shrubs and the overall encroachment effects on ecosystem processes. The chapter also describes the results of previous attempts to control shrubs using mechanical removal techniques. Chapters 2 and 3 examine the changes in vegetation and soil disturbances by animals, respectively, that result from mechanical shrub removal. Chapter 4 compares soil properties between ploughed sites occupied by newly−regenerated shrubs and unploughed sites dominated by mature shrubs. Chapters 5 and 6 describe the changes in the spatial distribution of soil nutrients and infiltration of water in a shrubland resulting from different combinations of ploughing and grazing. Chapter 7 examines the role of shrub−encroached lands as sinks for aboveground and belowground carbon (C) and considers the effects of different landscape elements (e.g. shrubs, log or debris mounds, trees) on C storage. Chapter 8, provides a conclusion, and evaluates the potentially negative effects of shrub removal as part of a land management strategy in this semi−arid system and explores the ecosystem values of shrubs including other possibilities to manage shrublands and suggestions for future research.