Gully erosion and woody plant encroachment are frequently observed in grasslands worldwide. Gully erosion driven by water processes is usually affected by topography, land-use change and vegetation cover. We hypothesised that trees, through their potential link with overland and subsurface flow, may have an impact on gully extension. However, very few studies have simultaneously considered tree encroachment and gullies. We used aerial photographs to study Acacia sieberiana encroachment and gully erosion in a South African grassland (KwaZulu-Natal Province) for a period lasting 64years. At the catchment scale, results showed that acacias started invading after 1976 and transformed the grassland into a savanna with 9.45% of tree cover in 2009. Gully area increased by 3.9% in the last 64years and represented 12.76% of catchment area in 2009. Mean estimated sediment loss was 200Mgha⁻¹ of gully y⁻¹, indicating a high erosion rate mainly due to the collapse of gully banks after swelling and shrinking. Volumetric retreat rate (V) of 15 gully heads was correlated with drainage area (Drain.A) by a power function explaining 64% of the variance: V=0.02*Drain.A^0.83. A positive correlation between gully retreat rate and Acacia canopy area was measured between 2001 and 2009 when established tree encroachment was observed. These results, associated with the susceptibility of this soil to subsurface flow and the observation of pipe erosion systems in the field, showed that both surface and subsurface processes occur in this sub-humid grassland and that trees can be indirectly associated with increased gully erosion.