Many tropical alpine treelines lie below their climatic potential, because of natural or anthropogenic causes. Forest extension above the treeline depends on the ability of trees to establish in the alpine environment. This ability may be limited by different factors, such as low temperatures, excess solar radiation, competition, soil properties, dispersal ability, and fires. In this paper we address the following two questions: Do trees regenerate above the present treeline, and what are the inhibiting factors for tree establishment? To answer these questions we described the spatial pattern of recent tree establishment below and above the present treeline in northern Ecuador. Also, we experimentally transplanted seedlings into the alpine vegetation (pĂĄ ramo) and the forest, and investigated the effect of shade, neighboring plants, and substrate on their survival. The number of naturally occurring tree sprouts (seedlings, saplings and ramets) was highest just outside the forest, and decreased with distance to the forest edge. However, only two species that were radiation-tolerant made up these high numbers, while other species were rare or absent in the pĂĄ ramo. In the forest, the species diversity of sprouts was high and the abundance per species was relatively low. The transplanted seedlings survived least in experimental plots without artificial shade where neighboring plants were removed. Seedling survival was highest in artificially shaded plots and in the forest. This shade-dependence of most tree species can strongly slow down forest expansion toward the potential climatic treeline. Due to the presence of radiation-tolerant species, the complete lack of forest expansion probably needs to be ascribed to fire. However, our results show that natural processes can also explain both the low position and the abruptness of tropical treelines.