Subalpine coniferous forests are adapted to cycles of fire and successional development, but increasing fire frequency and severity are altering historical stand structure, composition, and plant diversity. For instance, conifer regeneration has become increasingly variable as a result of prolonged aridity following fire, but the potential cascading effects on understory community development remain virtually unexplored. We used a natural experiment to investigate the relationships among understory plant succession, soil moisture regime, and variable tree canopy development over 30 years following the 1988 fires in the Greater Yellowstone Ecosystem, U.S.A. In 1990, at each of two study areas, plots were established in different site types defined by burn status (burned or unburned) and soil moisture regime (mesic or xeric), determined using biophysical indicators. We asked: (1) Are differences in soil moisture regime associated with differences in understory community composition (species richness, diversity, and functional group representation) during the first three decades after fire? (2) Does the relationship between soil moisture regime and community composition change over time as subcanopy (height >137 cm) tree densities increase? We confirmed our original designations of soil moisture regime using in situ measurements of soil moisture. Over the first decade of succession, species richness and diversity were lower in xeric-burned than in mesic-burned plots. Nearly 30 years after fire at the south-aspect study area, where subcanopy tree densities were low, seral understories diverged by soil moisture regime. There, graminoid cover was 23-fold higher, and forb cover was 3-fold lower, in xeric-burned than in mesic-burned plots. In contrast, in the mixed aspect study area, subcanopy tree densities were markedly higher. There, the understory did not vary by soil moisture regime, converging successionally and becoming more similar to unburned forest communities. Our results suggest that site-specific soil moisture regimes structure the early trajectory of post-fire understory recovery, but the relationship diminishes as tree canopies develop over time. However, under a warming climate, variable tree canopy development may compound increasing aridity, particularly on xeric sites, resulting in decreases in plant diversity and forb cover, increases in graminoid cover, and the potential for altered successional dynamics.