Foundation species promote local adaptation and fine‐scale distribution of herbaceous plants.

Interactions among neighbours can alter demography and traits of commingled species via adaptation or plasticity in phenotypic expression, and understanding these two mechanisms in diverse communities is important for determining the ecological and evolutionary consequences of plant–plant interactions.We reciprocally transplanted perennial species (Arenaria armerina and Festuca indigesta) among patches of two foundation shrub species and open ground to assess whether origin microsite (defined as the spatially distinct abiotic and biotic conditions associated with the two shrubs and open ground) determines germination, recruitment and growth that, in turn, promotes fine‐scale distribution of species among microsites. In addition, we tested the effect of origin microsite on traits, competitive ability, drought tolerance and outlier loci to assess whether origin microsite conditions drove differences in traits, strategies and adaptive loci.Germination was consistently greater for seeds planted back into their origin microsite relative to seeds sourced from foreign microsites, although this effect was weakened for recruitment. Plant growth was best in open sites regardless of origin microsite. In the greenhouse, A. armerina had conserved traits within origin microsite but distinct trait values among origins, specifically plants from the most productive microsite (e.g. sufficient light, high nutrients and improved water availability) had distinct trait values. Festuca indigesta had conserved trait responses among microsites while within microsite, individuals had significant trait plasticity to different environmental conditions. The combined field and greenhouse results suggest that fine‐scale distributions are supported by local adaptation among microsites of A. armerina and phenotypic plasticity of F. indigesta.Synthesis. Adaptation or plasticity in phenotypic expression has different implications for demographic rate and persistence of species in changing environments. Local adaptation to neighbours suggests that reductions in foundation species diversity could concomitantly lead to reduced genetic diversity of commingled species while a plastic response indicates a more robust and broad response to changing climatic and biotic conditions. [ABSTRACT FROM AUTHOR]