South American high-mountain ecosystems are greatly influenced by human disturbance. In the mountains of Córdoba, Argentina, Polylepis australis (Rosaceae) woodlands are currently highly fragmented and subject to extensive burning and livestock grazing, resulting in severe changes of habitat characteristics, which hamper natural regeneration. In order to find out how to achieve successful reforestation, we compared P. australis seedling survival and growth and the development of a shrubby habit for two seed provenances and different planting microsites. Survival of planted seedlings after 5 years was 70%, with most deaths (19%) in the first year and declining mortality with ongoing establishment. Survival did not show any relationship with seed provenance or microsite characteristics. Height growth averaged 34.6 ± 1.2 cm in 5 years. Seedlings produced from seeds collected in a well-preserved woodland grew taller and showed a higher tendency for development of shrubby habit than those produced from seeds collected in a degraded woodland. Seedlings planted in more degraded microsites with exposed soil or rock due to past grazing pressure grew less and developed a more shrubby habit than those planted in better preserved microsites. Our results show that restoration of degraded areas with P. australis is possible and that there is potential to improve restoration success with a careful selection of seed provenance and planting microsites.