Dominant grasses, trees and annual weed abundance may be useful indicators of soil conditions and could inform selection of target sites, species and techniques for restoration projects.Temperate grassy woodlands were once the dominant vegetation across many agricultural regions of south-eastern Australia, but most of these are now highly degraded and fragmented. Adequate conservation of these woodlands is dependent on successful ecological restoration; however, ecological barriers often limit ecosystem recovery once degrading processes are removed. To help identify these barriers, we used a state and transition framework to compare topsoils of little-disturbed (reference) and variously degraded remnants of grassy Eucalyptus albens Benth. and E. melliodora Cunn. ex Schauer woodlands. Topsoils of degraded remnants showed a repeated pattern, with the most compacted, most acidic and most depleted topsoils occurring in remnants dominated by Aristida ramosa R.Br. or Austrodanthonia H.P.Linder and Austrostipa scabra (Lindl.) S.W.L.Jacobs & J.Everett; the least compacted and most nutrient rich topsoils in remnants dominated by annual exotics; and generally intermediate topsoils in remnants dominated by Bothriochloa macra (Steud.) S.T.Blake or Austrostipa bigeniculata (Hughes) S.W.L.Jacobs & J.Everett. Surprisingly, topsoils beneath trees in reference sites (supporting Poa sieberiana Spreng.) were similar to topsoils supporting annual exotics for most soil properties. Chemical properties of topsoils from open areas of reference sites [supporting Themeda australis (R.Br.) Stapf] were usually intermediate and similar to Bothriochloa macra and Austrostipa bigeniculata topsoils. The most striking exception to these trends was for soil nitrate, which was extremely low in all reference topsoils and showed a high correlation with annual exotic abundance. We discuss the potential for positive feedbacks between soil nitrogen cycling and understorey composition and the need for intervention to assist possible nitrate-dependent transitions between annual and perennial understorey states.