A field study was conducted to investigate the effects of existing adult neighbors and gap size on the process of seedling establishment in Leymus chinensis. Seeds of L. chinensis were added to artificially created gaps in a degraded steppe in North China. Neighbor root exclusion was accomplished using polyvinyl chloride tubes sunk in the soil of gaps. Seedling emergence and survivorship was greater in gaps than in control areas, but growth performance was higher only in larger gaps (20 cm and 40 cm in diameter) with neighboring roots present and in all gaps without neighboring roots present. Seedlings produced no tillers in the control and few tillers in 10-cm- and 20-cm-diameter gaps. Seedlings had more tillers in the largest gaps (40 cm) without root exclusion and in all sizes of gaps with root exclusion. Differences between gaps in light levels can explain the patterns of emergence. However, root exclusion was the major factor that increased seedling growth performance. These results confirm that L. chinensis is a gap-enhanced species and suggest that restoration of degraded grassland needs to ensure that large light gaps and low belowground competition are regularly maintained to maximize successful seedling recruitment.