Abstract Differences in nutrient acquisition pathways between arbuscular mycorrhizal (AM) and ectomycorrhizal (EM) fungi are associated with greater soil organic matter accumulation and reduced inorganic nitrogen (N) availability in EM‐dominated forests. These plant–soil feedbacks are expected to influence seedling recruitment and the maintenance of diversity. Montane forests of Central America are characterized by a mosaic of AM and EM dominance. We used a seedling transplant and soil manipulation experiment on Volcán Barú, Panama, to evaluate whether patches of oak (EM‐dominated) forest and mixed (AM‐dominated) forest affect seedling growth. We predicted that (a) plant–soil feedbacks would result in lower soil inorganic N availability in oak than in mixed forests, (b) consequently AM seedlings would grow more slowly and have lower foliar N concentrations in oak forest and (c) dependence of EM seedlings on organic N uptake via mycorrhiza would mean that inorganic N addition would increase seedling performance for AM but not EM (i.e. oak) seedlings. As soil organic matter accumulation may affect seedling performance beyond altering nutrient supply, we also tested whether organic matter removal differentially affected AM and EM seedlings. Nitrogen availability was six times lower and the soil organic layer three times deeper in oak‐dominated stands compared to mixed stands. Foliar N was lower for AM seedlings growing in oak than in mixed forest, but did not differ for oak seedlings and was increased only marginally by N addition for both AM and EM seedlings growing in both AM and EM forests. Seedling growth did not respond to N addition or organic matter removal. However, AM seedlings generally grew slower in oak forest compared with AM forest, consistent with lower foliar N concentration and low‐light availability. These results suggest that changes in soil nitrogen availability have a limited effect on seedling growth. In the neotropics, EM tree communities occur at high elevation. Future upslope migration of trees may result in AM‐dominated tree communities encountering unfavourable soil conditions generated by EM‐dominated canopies. While longer term experiments are needed, our results suggest that AM seedlings may not be able to tolerate conditions associated with EM forest. A free Plain Language Summary can be found within the Supporting Information of this article.