Araucaria araucana is an iconic long-lived endangered tree species native to Southern Chile and Argentina. Araucaria forests and soils provide a myriad of ecosystem benefits to local communities, which are threatened by increasing anthropic-driven disturbances like fire and livestock overgrazing. The main objectives of this study were: (i) to evaluate the effect of uncontrolled livestock grazing on soil health; and (ii) to identify a set of sensitive soil health indicators to grazing pressure. Twenty soil health indicators in two contiguous degraded forest areas with contrasting grazing pressure were considered. A substantial shift in forest structure and a 12% reduction in tree coverage on the overgrazed sites were observed. Overgrazing has substantially affected soil physical, chemical, and biological health indicators, making soil conditions less suitable for forest regeneration. Significant increments in C:P and N:P ratios were observed due to overgrazing (p < 0.01). Soil chemical properties such as Kjeldahl nitrogen, P-fractions (total, inorganic, and available), cation exchange capacity (CEC), and pH were identified as the best indicators of overgrazing activity in these soils. Additionally, forest cover reduction and overgrazing altered soil physical indicators (e.g., saturated hydraulic conductivity, infiltration, and aggregate stability), suggesting changes in hydrological behavior with potential consequences in water storage and availability. Our results show that uncontrolled grazing in native protected forests degrades soils and forests, restricting forest regeneration and potentially accelerating erosive processes. These results emphasize the need for improved conservation plans for these endangered forests that systematically evaluates and monitors the direct and indirect effects of livestock grazing on soil health.