Germination and establishment of dominant tree species are critical for subalpine forest regeneration, but the influencing factors remain poorly understood. This study examines the effects of shrubs and microbial fertilizers on the early life stages of two dominant tree species, Larix mastersiana and Picea asperata, in a degraded subalpine forest in southwest China. Three seral stages representing a successional sequence (dense shrubland, sparse shrubland, and grassland) were selected, a total of 1080 seeds were sown across 360 microsites, with or without microbial fertilizer application. Various parameters, including microclimate conditions, soil physicochemical properties, germination rates, initial survival, and establishment rates, were monitored. Our results demonstrated that shrubs promoted germination and seedling establishment, with dense shrubland outperforming sparse shrubland. Dense shrublands reduced light intensity and increased humidity, while also resulting in average germination, initial survival, and establishment rates for both tree species that were 21 %, 59.29 %, and 35.97 % higher, respectively, compared to grassland. Although microbial fertilizers promoted germination by improving soil physicochemical properties, they indirectly hindered seedling establishment. Structural equation model revealed a positive effect of shrub density on seed germination and seedling establishment, independent of the measured microclimate and soil factors. This suggests that other unmeasured pathways likely contribute to these facilitative effects. In conclusion, shrubs exhibited stronger facilitative effects than microbial fertilizer on early-stage growth of subalpine dominant tree species, with denser shrublands being particularly effective. Therefore, in degraded subalpine forest restoration, using shrub canopies for sowing dominant trees accelerates positive succession and enhances ecosystem services.