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Abstract Drivers of shrub primary production and associated landscape impacts of encroachment are well known in drylands but have not been thoroughly studied in mesic and coastal habitats. The native, nitrogen-fixing shrub,Morella cerifera,has expanded into coastal grassland along the US Atlantic coast due to warming temperatures, but impacts on ecosystem function are not well known. Annual net primary production (ANPP) ofMorella ceriferaand key environmental drivers were measured long-term (1990 – 2007) across a chronosequence of shrub age on a mid-Atlantic barrier island. Soil and groundwater nutrients were compared with un-encroached grassland soil to evaluate impacts of vegetation on nutrient dynamics. Shrub ANPP declined with age at the same rate among all thickets, but there was variability from year to year. When climate variables were included in models, shrub age, precipitation, and freshwater table depth were consistent predictors of ANPP. Water table depth decreased over time, reducing ANPP. This may be due to rising sea-level, as well as to feedbacks with shrub age and evapotranspiration. Soil N and C increased with shrub age and were higher than adjacent grassland sites; however, there was a significant loss of N and C to groundwater. Our results demonstrate that drivers influencing the encroachment of shrubs in this coastal system (i.e., warming temperature) are not as important in predicting shrub primary production. Rather, interactions between shrub age and hydrological properties impact ANPP, contributing to coastal carbon storage.