The role of different plantation tree species in soil nutrient cycling is of great importance for the restoration of degraded lands. The objective of the present study was to evaluate the potential of N-fixing and non-N-fixing tree species to recuperate degraded land in southern China. The soil properties and N transformations in six forest types (two N-fixing plantations, three non-N-fixing plantations and a secondary shrubland) established in 1984 were compared. The N-fixing forests had 40–50% higher soil organic matter and 20–50% higher total nitrogen concentration in the 0–5 cm soils than the non-N-fixing forests. Soil inorganic N was highest under the secondary shrubland. The N-fixing Acacia auriculiformis plantation had the highest soil available P. There were no significant differences in soil N mineralization and nitrification among the forest types, but seasonal variation in these N processes was highly significant. In the rainy season, the rates of N mineralization (7.41–11.3 kg N ha−1 month−1) were similar to values found in regional climax forests, indicating that soil N availability has been well recovered in these forest types. These results suggest that N-fixing species, particularly Acacia mangium, are more efficient in re-establishing the C and N cycling processes in degraded land in southern China. Moreover, the N-fixing species A. auriculiformis performed better than other species in improving soil P availability.