It is well-known that allelopathy played an important role in formation of vegetation community the growth of plants by releasing allelochemicals. Previous studies have investigated the relationship between allelopathic effect and plants but these works mainly focused on the agricultural crops; the available information about the effect of allelopathy on the natural vegetation community is scarce. To explore the relationship between the vegetative community structure and allelopathic effects during natural succession, we investigated the effects of water and methanol extracts from Artemisia capillaries, the pioneer population of natural succession on the hilly-gully region of Loess Plateau, on the seed germination and seedling growth for A. capillaries and accompanying species. We aimed to identify an explanation for the vegetative community structure during the early stages of natural succession from the view of chemical ecology. The results showed that A. capillaries extracts had a significant allelopathic effect on the seed germination of three accompanying species, A. sacrorum, Bothriochloa ischaemum, and Lespedeza davurica. Low concentrations of extract (e.g., 2 mg/mL) promoted or slightly inhibited seed germination of the three plants, while high concentrations (200 mg/mL) caused strong inhibition of seed germination. Extracts of different parts of A. capillaries exerted different allelopathic effect on the plants. Compared to the root extracts, extracts from aboveground parts had a stronger influence on seed germination and seedling growth and inhibited the seed germination of A. sacrorum, B. ischaemum, and L. davurica; these effects were most dramatic at higher concentrations of extract (e.g., 200 mg/mL). Receptor plants responded differently to the different extracts. Methanol extracts from the roots of A. capillaries showed stronger inhibition than water extracts of roots on the seed germination of A. sacrorum when applied at the same concentration. However, water extracts from the aboveground parts exhibited stronger inhibition than the methanol extracts of roots on seedling growth. Additionally, a self-allelopathic effect was found in A. capillaries, resulting in inhibition of seed germination and seedling growth when used at 20 or 200 mg/mL. Our findings indicated that allelopathy may be an important factor regulating the formation of the vegetative community in the early stages of natural succession in the hilly-gully region of Loess Plateau, which is dominated by A. capillaries. Our study provided important insights into the formation of the vegetative community on the Loess Plateau and could improve our understanding of the relationship between plants and the mechanism of natural revegetation.