Positive biotic interactions play a significant role in shaping ecological communities. We used an individual-based model to demonstrate that plant facilitation on a microscale may cause ecosystem shifts on a landscape scale that can be announced by generic early-warning indicators. Recruitment of woody plants in harsh environments such as drylands often depends on nurse plants that ameliorate stressful conditions and facilitate the establishment of seedlings under their canopy. We found that these facilitative interactions may cause a treeless and a woodland state to be alternative stable states on a landscape scale if nurse plant effects are strong and if the environment is harsh enough to make facilitation necessary for seedling survival. A corollary is that under such conditions environmental change can bring drylands to tipping points for woody plant encroachment or woodland collapse. We show that the proximity of tipping points may be indicated by slowness of recovery of woody vegetation cover from small perturbations as well as by elevated temporal and spatial autocorrelation and variance. These signs are known to be indicators of critical slowing down. This is the first demonstration that the systemic phenomena of tipping points, announced by critical slowing down as a warning signal, may plausibly arise from microscale individual interactions, such as plant facilitation.