Abstract Woody plant encroachment into grasslands generally increases spatial heterogeneity of soil properties and processes and creates “islands of fertility” beneath woody canopies. However, little is known regarding the potential for these changes to influence spatial variation in soil fauna. We quantified population sizes, biodiversity, and trophic structure of soil nematode communities in a savanna parkland where woody plant clusters developed in grassland during the past century. Total nematode density was constant across transects from centers of woody clusters into grasslands. Family richness and Simpson's Dominance Index indicated nematode communities in grasslands and grassland/cluster edges were significantly more diverse than positions within the woody clusters. Relative densities of all nematode trophic groups changed significantly along the transect. Bacterivores nearly doubled in relative density from grassland (35%) to cluster centers (60%), apparently in response to higher concentrations of soil microbial biomass in wooded areas. Relative densities of plant parasitic nematodes decreased along transects from grasslands (35%) to centers of woody clusters (10%), implying decreased nematode herbivory in woody clusters despite much higher root biomass there. The structure index indicated nematode communities within woody clusters were more simplified than those in grassland and edge communities due to reductions in densities of omnivores and predators. Although nematode densities were lower at 10–20 than 0–10 cm, nematode community characteristics were generally similar between soil depths. Changes in nematode community and trophic structure described here could influence biogeochemical processes, species interactions, and successional processes in regions where woody plants are encroaching into grasslands.