Invasive grasses have spread over large areas of ancient savannas worldwide and have extensively impacted native landscapes in the neotropics. However, our understanding on how the displacement of native by exotic grasses may affect tree-grass coexistence in neotropical savannas is still poor. The present study tested the imposed effects of an exotic grass (Urochloa brizantha) and a native grass (Paspalum atratum) on survival rates, stem growth and biomass of seedlings of native tree species representative of savanna physiognomies of the Cerrado biome. We conducted multiple tree species experiments under natural field conditions subjected to experimental manipulations of light, water supply and fertilization. We found that both the native and exotic grass species reduced tree seedling survival, and these effects were not alleviated by shade or fertilization. Seedling stem length was reduced by the presence of either native or exotic grasses, irrespective of fertilization. Seedling biomass was reduced by both native and exotic grasses, irrespective of light conditions, irrigation, or fertilization. The negative impacts of the exotic grass on seedling survival and growth were larger than those imposed by the native grass, indicating that the displacement of native by exotic grasses can strongly impact recruitment potential of tree species. Due to the magnitude of exotic grass invasiveness in neotropical savannas, and its potential impacts on recruitment patterns of native trees, adequate policies and management plans are needed to control exotic grass spread to conserve native biodiversity and ecosystem services.