Restoration of native vegetation often focuses on the canopy layer species, with the assumption that regeneration of the understory elements will occur as a consequence. The goal of this study was to assess the influence of canopy restoration on the composition and abundance of understory plant species assemblages along riparian margins in the Hunter Valley, NSW, Australia. We compared the floristic composition (richness, abundance, and diversity) of understory species between nonrevegetated (open) and canopy revegetated plots across five sites. A number of other factors that may also influence understory vegetation, including soil nutrients, proximity to main channel, and light availability, were also measured. We found that sites where the canopy had been restored had lower exotic species richness and abundance, as well as higher native species cover, but not native species richness, compared with open sites. Multivariate analysis of plots based on plant community composition showed that revegetated sites were associated with lower total species diversity, light availability, and exotic cover. This study has found that the restoration of the canopy layer does result in lower exotic species richness and cover, and higher native species cover and diversity in the understory, a desirable restoration outcome. Our results provide evidence that restoration of native canopy species may facilitate restoration of native understory species; however, other interventions to increase native species richness of the understory should also be considered as part of management practice.