Deforestation has been occurring in Ethiopia for millenia and has accelerated during the last century. On the other hand, historical accounts indicate that restricted afforestation of mountainous areas was initiated already 550 years ago. One of these areas was the Menagesha Forest. To reconstruct forest site history, soil samples from the Menagesha Forest and Wendo-Genet areas were analyzed for ¹³C natural abundance and C concentration. In soils from Menagesha, δ¹³C values ranged from −17‰ to −23‰ in the deeper horizons, and from −24‰ to −27‰ in the surface mineral soils and litter layer. This indicates that C₄ grasses were once an important component of this ecosystem, and supports the historical accounts. In the Wendo-Genet area, δ¹³C values ranged from −16‰ to −14‰ in the deeper horizons, and from −23‰ to −16‰ in the topsoil in both cultivated lands and forested sites, suggesting more recent shifts from grassland to woodland or forest. With regard to reforestation and soil conservation, it is encouraging that productive forest with high soil organic carbon concentration could be established on the steep slopes at Menagesha. The study also shows that Ethiopian forest history is more complex than commonly appreciated, and that there has not been a simple unbroken trend of deforestation.