Large areas of semiarid grasslands in the southwestern United States have been virtually replaced by shrubs during the past century. Understanding the causes and consequences of such vegetation dynamics requires that we elucidate the interplay between external forces of change (e.g., climate, human impacts) and the internal forces within these ecosystems that foster resilience and/or stability. Several conceptual models of and ecosystems address this interplay by including the potential role of autogenic shrub effects on ecosystem processes that lead to the formation of "resource islands" and tend to promote shrub persistence. Specifically, during the process of shrub establishment and maturation, the cycling of nutrients is progressively confined to the zones of litter accumulation beneath shrubs, while bare intershrub spaces become increasingly nutrient poor. As shrub resource islands develop, there is increased interception and stemfiow by shrub canopies, confining infiltration of nutrient-enriched rainfall directly beneath the shrubs; the barren intershrub spaces generate overland flow, soil erosion by wind and water, and nutrient losses. These islands are preferred sites for the regeneration of shrubs and herbaceous plants and are correlated with spatial variation in soil microbial populations and soil microfauna that promote nutrient cycling. If further changes in the transition between grassland and shrubland are to be correctly predicted, or if we wish to intervene and redirect transitions, we must develop a greater mechanistic understanding of the structural and functional relationships between shrubs and the resource islands associated with them.