Plant litter dynamics and their effects on plant community structure are discussed in this review. Litter production depends mainly on site productivity, but environmental factors and chance also contribute to variation. There are time lags between the production of plant organs and their transformation into litter, which is an important aspect of litter dynamics not often included in models. Herbivory and other processes that reduce biomass or productivity can decrease litter production. Litter decomposition involves complex interactions, with physical and chemical degradation, invertebrate consumption, and decomposition being influenced by the environment and litter characteristics. The relative importance of these processes varies among systems. Litter directly and indirectly alters the physical and chemical environment. Decomposition of litter releases nutrients and phytotoxic substances into the soil. Physical changes caused by litter also affect decomposers, indirectly influencing the chemical environment. Accumulated litter intercepts light, shading seeds and seedlings, and reduces soil temperature variation. Litter reduces soil evaporation by lowering maximum temperatures and creating a barrier to water vapor diffusion. However, litter may also reduce water availability when it retains a large proportion of rainfall. Litter acts as a physical barrier for seedling and sprout emergence and for seeds reaching the soil. The heterogeneity introduced into the abiotic environment by litter accumulation can affect community structure. This effect can be direct (when litter of one species affects another) or indirect (when litter from one species alters interactions between two others). Strategies related to litter accumulation include litter tolerance, timing of litterfall to optimize nutrient recycling, and litter accumulation to deter competitors. The evidence suggests that only litter tolerance has adaptive value as the most likely explanation.Plant litter dynamics and their effects on plant community structure are discussed in this review. Litter production depends mainly on site productivity, but environmental factors and chance also contribute to variation. There are time lags between the production of plant organs and their transformation into litter, which is an important aspect of litter dynamics not often included in models. Herbivory and other processes that reduce biomass or productivity can decrease litter production. Litter decomposition involves complex interactions, with physical and chemical degradation, invertebrate consumption, and decomposition being influenced by the environment and litter characteristics. The relative importance of these processes varies among systems. Litter directly and indirectly alters the physical and chemical environment. Decomposition of litter releases nutrients and phytotoxic substances into the soil. Physical changes caused by litter also affect decomposers, indirectly influencing the chemical environment. Accumulated litter intercepts light, shading seeds and seedlings, and reduces soil temperature variation. Litter reduces soil evaporation by lowering maximum temperatures and creating a barrier to water vapor diffusion. However, litter may also reduce water availability when it retains a large proportion of rainfall. Litter acts as a physical barrier for seedling and sprout emergence and for seeds reaching the soil. The heterogeneity introduced into the abiotic environment by litter accumulation can affect community structure. This effect can be direct (when litter of one species affects another) or indirect (when litter from one species alters interactions between two others). Strategies related to litter accumulation include litter tolerance, timing of litterfall to optimize nutrient recycling, and litter accumulation to deter competitors. The evidence suggests that only litter tolerance has adaptive value as the most likely explanation.