Determining barriers to tree regeneration along elevational gradients is important to predict shifts in regeneration patterns under climate change scenarios. The stress-gradient hypothesis predicts that facilitation predominates at high elevations and competition at low elevations. Invertebrate herbivory may also play an important, yet hardly recognized role, in low elevation and degraded areas. Our objective was to understand the relative changes in facilitation, competition and invertebrate herbivory along an elevational gradient degraded by long-term livestock rearing and repeated wildfires. Our study area was a seasonally dry ecosystem in central Argentina subjected to forest restoration activities. We planted 3000 saplings of the dominant early and late successional tree species in a full factorial design that included elevation (3 levels: low, 1300; intermediate, 1800; and high, 2300 m a.s.l.), microsite treatment, where we manipulated facilitation and competition (4 levels: tussock grasses mowed to the ground, tussock grasses mowed to 15 cm above the ground, unmowed tussock grasses with an average height of 70 cm, and tussock grasses mowed to the ground near rock outcrops) and 5 blocks per elevation. We monitored sapling survival, change in height, and damage by invertebrate herbivores during one year. For both species, sapling survival significantly increased with elevation, while sapling change in height decreased. Survival and change in height for microsite treatments suggest weak competition for the early successional species and facilitation for the late successional species. Notably, we did not find the elevation and microsite treatment interaction predicted by the stress-gradient hypothesis. The main invertebrate herbivores were leaf-cutting ants, which damaged 42, 33 and 0%, and 25, 27 and 0% of the saplings according to species, for the low, intermediate and high elevations, respectively. Damage did not differ significantly between microsite treatments for either species. Survival for saplings with evidence of damage by leaf-cutting ants was 2.5 and 3.4 times lower as compared saplings with no evidences, according to species. Our findings imply that under a climate warming scenario, future facilitation and competition effects will be similar to current effects, whereas leaf-cutting ants rather than competition may increasingly limit tree regeneration.