Sand burial is an important selective pressure for growth, survival, and distribution of sand dune plants. Its effects on seed germination and seedling establishment, however, for different species are quite different. Experiments were conducted in the Mu-Us Sandy Grassland of North China to determine the effects of sand burial on seed germination and seedling growth of dominant perennial grasses Psammochloa villosa (Trin.) Bor and Leymus secalinus (Georgi) Tzvel. Small, medium, and large seeds of P. villosa and small and large seeds of L. secalinus were buried at 0-, 1-, 2-, 4-, 6-, and 8-cm depths in sand. P. villosa seed germination and seed dormancy in sand were significantly influenced by sand burial depth but not by seed size, whereas seed germination and seed dormancy of L. secalinus were significantly influenced by both sand burial depth and seed size. Emergence percentages for large seeds were higher than those for smaller seeds, suggesting that larger seeds are ecologically better adapted to dune habitats. Seeds that did not germinate in sand were in enforced dormancy and formed a soil seedbank, which can enhance plant survival on sand dunes. One-week-old and 2-wk-old P. villosa seedlings could tolerate 75% and 100% of their shoot height of sand burial, respectively, and the shoot elongation growth was enhanced by the burial stress. Both 1-wk-old and 2-wk-old seedlings of L. secalinus only tolerated up to 75% sand burial. The growth of L. secalinus seedling was inhibited by sand burial due to the decreased biomass and slow shoot elongation. The lack of tolerance of seedlings of this species to total sand burial might restrict its distribution on sand dunes.