Much information on restoration and management exists for wet tropical forests of Central America but comparatively little work has been done in the dry forests of this region. Such information is critical for reforestation efforts that are now occurring throughout Central America. This paper describes processes of degradation due to land use and provides a conceptual framework for the restoration of dry tropical forest. Most of this forest type was initially harvested for timber and then cleared for cattle in the last century (1930–1970). Only 1.7% remains largely restricted to infertile soils and remote areas on the Pacific coastal side of Panama, Costa Rica, Nicaragua and Mexico. These cleared areas are again in a state of transition due to a combination of decreasing land productivity, and land speculation for tourism development. Some farms have been sold to new landowners who are interested in reforesting to increase biodiversity and forest cover. Attempts have therefore been made to reforest by protecting the land from fire and cattle, by supplementing natural regrowth with enrichment planting, or through use of tree plantations. Experimental studies have demonstrated the ability of these lands to grow back to forests because of native species ability to sprout after cutting, and the capacity of remnant trees in field and riparian zones to provide seeds and to moderate edge environment for seed germination and seedling establishment. However, research also shows that on sites with long histories of land clearance, species diversity will remain low with functional groups missing unless some active management occurs. Under-planting with late-successional native tree species can add structure and diversity; enrichment planting with large-fruited shade-intolerant species can initiate new islands of more diverse regeneration beneath their canopies; and plantings of fast-growing, nitrogen-fixing trees that provide light canopy shade can moderate the environment below, promoting regeneration establishment of late-successional species. Plantations are the only option for lands that have lost almost all remnants of native forest, and where soils and vegetation have changed to new states of structure and function. Conversion of pastures to tree plantations that can facilitate natural regeneration beneath them is appropriate when pastures are prone to fire and/or lack immediate seed sources nearby. After the grasses have been shaded out, natural recruitment can slowly occur over a 10–15 years period. Under-planting of shade-tolerant late-successional species can supplement species composition and structure.