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Root bound means exactly that, the plant's roots have outgrown the container and have begun to wrap around on the inside of the pot. Some plants are only slightly root bound, allowing you to carefully tease the root mass apart and gently spread them when transplanting into your garden.
Other times you may encounter a plant that is so badly root bound it is difficult to even remove it from the plastic nursery pot. Often in such cases this is when you will see the roots protruding from the drainage holes. In this case, if the pot is flexible you can squeeze it a bit all around and loosen the root ball allowing you to remove it. If this does not work you will need to cut the pot away from your new plant.
Once removed you will likely see a plant with a root ball similar to that of these Shasta daisies, that I rescued from the half dead plant rack at Lowes. You will probably not be able to loosen the roots in this case.
To improve your plant's chances you will need to make 3-6 vertical cuts (depending on plant size) with a sharp, sterile knife around the ball. You may also want to cut an X in the bottom of the root ball.
Place your plant into the prepared planting hole, spread the roots of the ball apart, if possible. Now add your soil, gently packing it down to remove air pockets.
Water slowly and deeply to hydrate the plant and its roots. This method will also help the soil settle around the roots. Water regularly until your plant is established and then as directed for this particular specimen. You might also want to include a plant growth hormone with the watering to stimulate new root growth. Some gardeners will also consider pruning back some of the plant's foliage to encourage root regrowth success.
Keep close watch on your new plant, as it as been doubly traumatized, first by being root bound and now by your efforts to save it. Keep it moist and you may need to provide a bit of shade if it is planted in a sunny location.
Thank you Barbara - most informative - and with pictures that I can actually see what you did! Yeah, and i just planted a rootbound plant two days ago - didn't know what to do with it. Now if I can just remember which one it was.
Prepare a new pot: Use small pieces of broken pottery or stoneware to cover the drainage holes. This will prevent the soil (and accompanying nutrients) from washing out every time you water. If the pot lacks drainage holes, either add some using a cordless drill with a ceramic bit (don't forget the safety glasses), or cover the bottom of the pot with an inch of horticultural grade charcoal or coarse gravel.
Remove the plant: Remove the plant from its pot and gently disturb the roots to loosen up the root ball. If necessary, carefully score an X in the bottom of the rootball with a sharp knife to loosen them.
Transplant: Fill the new pot with a well-drained potting mix so that when the plant is placed in the pot, the top of the rootball will rest within an inch of the rim. A good mix consists of equal parts peat moss, vermiculite or perlite, and sand.
Set the plant into the pot and gently fill in around the rootball with soil. As much as possible, avoid adding soil to the top of the pot. You don't want the rootball to end up deeper than originally planted. Tap the pot gently on a hard surface to encourage the potting mix to settle in around the plant and water the pot thoroughly until water runs freely through the drainage holes. Continue to add water and soil around the plant as needed, but do not tap the pot on a hard surface once you've watered it, or you'll only compact the soil. Do not resume fertilizing for several weeks.