Dry mulch, as soil moisture conservation techniques, is seldom practiced for growth and survival of transplanted tree seedlings in dry period in Eritrea. Field experiment was conducted at Halhale, Eritrea with Dry Hyparrhenia rufa, as a mulch, on a flat basin for growth and survival of seedlings of Grevillea robusta and Acacia polyacantha subspecies Campylacantha by involving four management practices: 1) mulching and watering basins (MW); 2) no-mulching but watering basins (NMW); 3) mulching but no-watering basins (MNW); 4) no-mulching and no-watering basins (NMNW). The experimental design was CRD with three replications. MW and NMW were watered 180 litters (20 litters/month) but MNW and NMNW were not watered at all. Parameters such as soil moisture content of the basin, early growth performance of seedling and survival rate of the seedlings were studied. The result indicated that there were statistically significant differences (p 0.05) among the treatment for soil moisture content and early growth performance of the seedlings. The average volumetric water content (VWC%) on 0 - 20 cm soil depth at the end of dry period of MW, NMW, MNW, and NMNW were 10.08%, 7.7%, 6.3% and 3.9% respectively. Mean height increment of seedlings of G. robusta of MW (100 cm), NMW (83.3 cm), MNW (31.5 cm) and NMNW (9 cm) were recorded, while the mean height increments of seedlings of A. polyacantha subsp. Campylacantha of MW (48 cm), NMW (25 cm), MNW (4.5 cm) and NMNW (3 cm) were recorded. The mean survival rate of G. robusta was 91.8% of which the highest (100%) survival rate was recorded under MW, NMW and MNW, but the lowest (66.7%) was recorded by NMNW. All seedlings of A. polyacanth subsp. Campylacantha were survived, irrespective of the treatments. The study concluded that soil moisture content, early growth performance of seedlings, and survival rate of transplanted tree seedling was improved by application of mulch.