Management prescriptions for contemporary ponderosa pine (Pinus ponderosa Dougl.) forests often incorporate the restoration to a structure that more closely resembles pre–European contact forests. Successful restoration programs should incorporate the herbaceous understory component; however, published research specifically addressing changes in understory species composition is minimal. Ponderosa pine influence on the undercanopy environment may be an important factor in understory vegetation distribution. In this study, we addressed the relationships among ponderosa pine abundance, undercanopy environment, and understory species composition and made inferences with respect to restoration potential. Data representing vegetation, soil, and environmental attributes were measured in 28 plots in an eastern Oregon ponderosa pine forest. Relationships among the parameters measured were evaluated using cluster analysis, indicator species analysis, and ordination. Ponderosa pine occupancy was inversely related to understory perennial bunchgrass abundance and species diversity and appeared to regulate the undercanopy habitat through alterations in light intensity, nitrogen availability, and soil temperature. Light availability was the most important ponderosa pine–influenced undercanopy environmental parameter associated with understory vegetation distribution. These data suggested that degradation in the undercanopy environment associated with higher levels of ponderosa pine abundance may be temporary and that restoration practices that reduce pine occupancy should promote undercanopy conditions favorable to perennial bunchgrass growth. However, understory vegetation recovery in stands with excessive pine ingrowth may be constrained by desired understory species loss or invasion by more competitive understory vegetation.