Forest loss in the tropics is one of the most critical contemporary environmental problems. Understanding the complex sociopolitical and ecological forces operative in producing this problem has thus become an important scientific mandate. Some recent literature has suggested that modern market economy trends in Latin America—namely, rural out-migration and policies strongly favoring high-input, industry-based agriculture—have helped curtail and sometimes revert the net loss of tropical forests, mainly through afforestation of land abandoned by smallholders. Government in Mexico, a megadiverse country with one of the biggest out-migration and remittance economies in the world, has excelled in applying free-market policies and in discouraging historical smallholder agriculture. Our analysis of Mexico's development path and of recent deforestation and reforestation trends at the national, regional, and local levels shows that, contrary to expectations, net deforestation is still occurring, and that other development, agricultural, and reforestation strategies are needed.