Clearcutting reduces proximity to seed sources and mycorrhizal inoculum potential for regenerating seedlings. Partial retention of legacy trees and protection of refuge plants, as well as preservation of the forest floor, can maintain mycorrhizal networks that colonize germinants and improve nutrient supply. However, little is known of overstory retention levels that best protect mycorrhizal inoculum while also providing sufficient light and soil resources for seedling establishment. To quantify the effect of tree retention on seedling regeneration, refuge plants, and resource availability, we compared five harvesting methods with increasing retention of overstory trees (clearcutting (0% retention), seed tree (10% retention), 30% patch retention, 60% patch retention, and 100% retention in uncut controls) in an interior Douglas-fir-dominated forest in British Columbia. Regeneration increased with proximity to legacy trees in partially cut forests, with increasing densities of interior Douglas-fir, western redcedar, grand fir, and western hemlock seedlings with overstory tree retention. Clearcutting reduced cover of ectomycorrhizal refuge plants (from 80 to 5%) while promoting arbuscular mycorrhizal plants the year after harvest. Richness of shrubs, herbs, and mosses declined with increasing harvesting intensity, but tree richness remained at control levels. The presence of legacy trees in all partially cut treatments mitigated these losses. Light availability declined with increasing overstory cover and proximity to leave trees, but it still exceeded 1,000 W m−2 in the clearcut, seed tree and 30% retention treatments. Increasing harvesting intensity reduced aboveground and belowground C stocks, particularly in live trees and the forest floor, although forest floor losses were also substantial where thinning took place in the 60% retention treatment. The loss of forest floor carbon, along with understory plant richness with intense harvesting was likely associated with a loss of ectomycorrhizal inoculum potential. This study suggests that dispersed retention of overstory trees where seed trees are spaced ~10–20 m apart, and aggregated retention where openings are <60 m (2 tree-lengths) in width, will result in an optimal balance of seed source proximity, inoculum potential, and resource availability where seedling regeneration, plant biodiversity, and carbon stocks are protected.