Over the past four decades the establishment of pine plantations in high altitude páramo grasslands has been a growing land use change in Ecuador. As a result, plantation forestry has transformed some highland landscapes from grasslands to ones dominated by exotic trees. This transformation is analyzed in the context of forest transition theory, which provides a framework for explaining scenarios of increasing forest cover. Forest transition theory predicts that reforestation and afforestation, encompassing the establishment of secondary forests and plantations, respectively, occur when economic development leads to the abandonment of agricultural land or when forest scarcity prompts increases in plantation establishment. This research demonstrates that projected forest scarcity has played an important role in páramo to pine transitions. However, it also indicates that, in Ecuador, afforestation has been seen as a potential means to economic development rather than a consequence of it. Furthermore, this case brings into question some of the assumptions of forest transition theory with respect to the environmental benefits of transition. The evidence presented indicates that, in the case of páramo to pine transitions, the biophysical response includes a loss of soil carbon, nitrogen, and water retention capacity, implying important trade-offs between the ecosystem services provided by páramos and those provided by pine plantations. These results suggest that both the existing land cover prior to forest transition and the type of forest cover established during transition merit more attention in forest transition theory.