During the second half of the twentieth century, southern Brazil underwent rapid industrialization and urbanization. In earlier historical periods in Europe and North America, these trends have contributed to a forest transition in which deforestation gives way to forestation. In a developing country, like Brazil, with a more skewed income distribution and a larger rural underclass, industrialization and urbanization may not give rise to a forest transition. These competing theoretical expectations were tested with data on forest cover change from the Brazilian censuses of 1970 through 1995/1996 for the state of Santa Catarina in southern Brazil. The analyses show forestation replacing deforestation between 1975 and 1980. An increase in the extent of planted forests close to urban areas explains the turnaround in forest cover trends. Because the planted forests contain relatively few native plant species, the expansion of these forests does not ease the biodiversity crisis. The re-emerging second Atlantic forest represents a smaller, less diverse and degraded version of the first Atlantic forest.