Early establishment and sapling growth is a key phase in ensuring cost-effective reforestation success in relation to biodiversity outcomes. Therefore, species selection must consider the interaction between plant functional traits and the often-challenging and heterogeneous biophysical environment of degraded landscapes. In this study, we examine how microtopography (slope) results in spatial heterogeneity of soil nutrients, especially phosphorus (P) in a degraded tropical pasture landscape in Queensland, Australia. We then explore how this small-scale heterogeneity influences the growth of two native tree species, Cardwellia (C.) sublimis (Proteaceae) and Flindersia (F.) brayleyana (Rutaceae), which differ in key nutrient-acquisition strategies. The proteaceous C. sublimis was found to be buffered from possible P limitation in degraded soils due to its effective P acquisition by cluster roots. In contrast to C. sublimis, which showed no difference in growth after 5 years across a range of soil conditions, F. brayleyana was found to be highly responsive to soil conditions with increased growth in low-slope, higher P availability areas. The ability of F. brayleyana to take advantage of high soil P levels, including the development of leaves with higher P concentrations, resulted in an apparent switch in competitive fitness between these two species across a landscape gradient. Synthesis and applications. In a detailed study of a landscape reforestation experiment in North Queensland, Australia, we demonstrate that site edaphic factors can vary within tens of metres due to topographic relief, and that species respond differently to these conditions. We therefore show the need to consider both the spatial heterogeneity of edaphic factors and the below-ground functional traits of potential reforestation species when planning reforestation programmes.