Shrubs play a pivotal role in reversing desertification and in promoting ecological rehabilitation in severe environments. However, how the interactions between shrubs and their understorey species change during restoration remains unclear. Here, we report the results of an observational study conducted in the Mu Us Desert of northern China. This study explored how dune stabilization and the size of individual shrubs affect shrub–herb interactions. In particular, we aimed to determine how different life-history groups and performance indicators (e.g., biomass and richness) of subordinate species respond to shrub–herb interactions during dune stabilization. The shrub Artemisia ordosica had positive effects on understorey species in this dune system. The ability of the shrub to promote the growth of understorey species increased with dune stabilization, but decreased from small to large shrubs. This effect was due to an increase in the relative abundance and biomass of perennials and their higher sensitivity to the positive effects of the shrubs. In contrast, the ability of shrubs to improve the richness of understorey species decreased with dune stabilization, but increased from small to large shrubs. This effect occurred because perennials suffered high strain during recruitment in disturbed open patches of the semi-fixed dunes, particularly below small shrubs. Our results support the theory claiming that communities are sets of hidden interaction groups that have contrasting responses (neutral for annuals, but facilitative for perennials) to dominant neighbors in a single community, depending on their functional strategies. Furthermore, our study highlights the high efficiency of A. ordosica in facilitating ecological restoration of dry and disturbed sandy communities.Read less <