Invasive buffelgrass, potentially invasive natalgrass, and the native grass Arizona cottontop were evaluated for their competitive response to one another in southern Arizona. Targets and neighbors were transplanted in a full-factorial randomized complete-block design consisting of nine pairwise combinations and each species alone (n = 120). Plant pairs were separated by 5 cm and allowed to grow during the 2007 monsoon season (101 d). Aboveground biomass, reproduction, and Arizona cottontop water-potential data were collected. Buffelgrass neighbors reduced aboveground biomass production and reproductive output significantly more than did intraspecific neighbors (P < 0.05), whereas natalgrass neighbors did not significantly affect Arizona cottontop biomass production or reproductive output (P > 0.05). Cottontop and buffelgrass had no significant effect on natalgrass biomass. Similarly, cottontop and natalgrass neighbors had no neighbor effect on the biomass of buffelgrass. Arizona cottontop plants that neighbored buffelgrass averaged a significantly lower water-potential value of −3.18 MPa (P < 0.05), compared with −1.17, −0.93, and −1.32 MPa for control plants (i.e., those with no neighbor), intraspecific neighbors, and natalgrass neighbors, respectively. Although buffelgrass competitive ability is consistent with its invasiveness when grown with native Arizona cottontop, natalgrass was an intermediate competitor. This suggests that natalgrass is less of a competitive threat to native perennial grasses than buffelgrass, but that it may be more tolerant to resource depletion (i.e., the presence of buffelgrass) relative to Arizona cottontop.