Although a variety of factors can influence plant diversity within ecological communities, current research has primarily focused on aboveground mechanisms while the effects of belowground interactions remain unclear. Nevertheless, belowground interactions are receiving more attention with a particular emphasis on relationships between plants and soil borne pathogens. Although pathogens may have a negative effect on plants at the individual level, mathematical models predict that at the community level the net effects of pathogens may be important for increasing diversity by alleviating competitive impacts between species. Pathogens may also promote the success of invasive plant species through similar mechanisms. To address the importance of plant-pathogen interactions in this context, three greenhouse experiments were carried out examining interactions between grassland plant species and a soil-borne pathogen, Macrophomina phaseolina (Tassi) Goid. The first experiment tested the effects of M. phaseolina on competitive interactions between an invasive legume, Lespedeza cuneata (Dum. Cours.) G. Don, and two native congeners, Lespedeza capitata Michx. and Lespedeza virginica (L.) Britton. Lespedeza cuneata exhibited a high degree of resistance to the pathogen and also elicited a stronger competitive effect than the native species suggesting that the presence of M. phaseolina could increase success in the field. The second experiment examined the effect of three M. phaseolina inoculum densities on L. capitata and L. cuneata. Although M. phaseolina had no effect on L. cuneata, L. capitata exhibited reductions in biomass at the highest inoculum density tested. The third experiment tested the response of 17 grassland species to M. phaseolina. Of the species tested, Asclepias syriaca and L. cuneata exhibited the greatest tolerance to the pathogen, possibly due to chemical defense and symbiosis with antagonistic bacteria.