UC Santa Cruz

International forest landscape restoration commitments have promoted the restoration of millions of hectares of degraded and deforested lands globally, but few forest restoration approaches provide both ecologically‐sound and financially‐viable solutions for achieving the spatial scale proposed. One potential revenue source for restoration is selective harvesting of timber, a product for which there is a clear global market and increasing demand. The use of commercially valuable exotic trees may attract farmers to restoration, but can be a major concern for ecologists. Here, we present results collected over 7 years from experimental studies at three sites across the Brazilian Atlantic Forest to assess the impacts of incorporating exotic eucalypts as a transitional stage in tropical forest restoration on above‐ground biomass accumulation, native woody species regeneration and financial viability. Biomass accumulation was nine times greater in mixed eucalypt‐native species plantations than native only plantings due to fast eucalypt growth. Nonetheless, the growth of native non‐pioneer trees was not affected or only slightly reduced by eucalypts prior to logging. Eucalypts did not negatively affect the natural regeneration of native woody species before or after eucalypt logging. Canopy cover regrew quickly but was slightly lower a year following logging in mixed eucalypt‐native species plantations. Natural regeneration richness and planted non‐pioneer growth were similar across treatments in the post‐logging period. We found higher variation of biomass accumulation and native species regeneration among sites than between plantation types within sites. The income from eucalypt wood production offset 44%–75% of restoration implementation costs. Synthesis and applications. Many of the negative effects attributed to eucalypts on the growth and natural regeneration of native trees depend on features of the production system, landscape structure, soil, and climate in which they are grown, rather than the effects of eucalypts per se. In Brazil's Atlantic Forest region, exotic eucalypts can become important allies of tropical forest restoration, and their use and investment opportunities should be considered within the portfolio of options supported by public and private funding and policies.