Summary Tree‐size distributions are changing in many natural forests around the world, and it is important to understand the underlying processes that are causing these changes. Here we use a classic conceptual framework – the shifting mosaic of patches model – to explore the ways in which competitive thinning and disturbance influence tree‐size distributions, and to consider the effects of temporal variability in disturbance frequency on the size structure of forests. We monitored 250 stands of Nothofagus solandri var. cliffortiodes (mountain beech), randomly distributed over 9000 hectares, for 19 years. Mountain beech is a light‐demanding species that forms monospecific forests in New Zealand mountains. For the purposes of our model, we assumed that each stand functions as an even‐aged population: it is initiated by a pulse of recruitment, undergoes competitive thinning as it matures, and is eventually destroyed by a disturbance event. The tree‐size distribution of the whole forest is driven partly by the frequency and temporal patchiness of disturbance events and partly by competitive processes within the constituent stands. Temporal changes in stem density and mean tree size were observed to be remarkably similar in all young stands, indicating that a consistent packing rule operates during this phase of stand development. A popular idea in the self‐thinning literature is that the maintenance of constant leaf area index (LAI) provides the mechanism for this packing rule, but our analyses suggest that LAI increased by about 30% during the thinning phase. We use leaf economic theory to develop a new packing rule based on light interception, and argue that LAI increases with stand age because of changes in canopy organisation. Smaller trees were significantly more likely to die than larger trees within the young stands. Tree‐diameter distributions within young stands were left skewed but those of older populations were normally distributed. These observations are consistent with asymmetric competition winnowing out small, suppressed trees from young stands but having less effect in older stands. Large‐scale disturbances created gaps of sufficient size to allow mass recruitment of seedlings in about 0.8% of stands each year. Older stands were most susceptible to such large‐scale disturbance, but the trend was weak. The diameter‐distribution of the whole Nothofagus forest was found to be approximately exponential in form. Simulation models only produced realistic diameter distributions when competitive packing rules and disturbance were included. Therefore, the shifting mosaic model provides a general framework for understand the ways in which these mortality processes determine forest size structure. The diameter distribution of the forest was not in equilibrium over the 19‐year study. Using simulation models, we show that temporal variability in disturbance frequency can generate enormous deviations in tree‐diameter distributions away from the long‐term mean, leading us to conclude that modern‐day disequilibrium in natural forests may be the legacy of past disturbance events.