In the last century, ponderosa pine forests in the Southwest have changed from more open park-like stands of older trees to denser stands of younger, small-diameter trees. Considerable information exists regarding ponderosa pine forest fire history and recent shifts in stand structure and composition, yet quantitative studies investigating understory reference conditions are lacking. We developed and applied an approach using phytoliths to understand forest-grassland vegetation dynamics and historical conditions. Phytoliths are particles of hydrated silica that form in the cells of living plants that are often morphologically distinct. Upon plant death and decay, the stable silica remains in the soil. Soil phytoliths are a useful tool to examine the vegetation history of an area. We created and published a phytolith reference collection, including a previously undescribed diagnostic phytolith for ponderosa pine, examined relationships between contemporary vegetation and surface soil phytolith assemblages using a phytolith classification system, and used phytoliths to explore forest-grassland vegetation dynamics. Results indicate that soil phytolith assemblages reflect long-term accumulation of organic matter in soils, and do not mirror contemporary vegetation at the scale of several meters, but rather several kilometers. Our data suggest that in the past, some C4 (warm-season) grasses were more widely distributed but less abundant, grasses were more spatially continuous, total grass production was greater, and some species (Koeleria sp. and Bromus sp.) were more common in the study area. These results provide important information on historical understory conditions useful to ecologists and land managers for developing and implementing strategies promoting desired future conditions in the region.