Montane habitats are characterized by high variation of environmental factors within small geographic ranges, which offers opportunities to explore how forest assemblages respond to changes in environmental conditions. Understanding the distributional transition of adult trees and seedlings will provide insight into the fate of forest biodiversity in response to future climate change. We investigated the elevational distribution of 156 species of adult trees and 152 species of seedlings in a tropical montane forest in Xishuangbanna, southwest China. Adult trees and seedlings were surveyed within 5 replicate plots established at each of 4 elevational bands (800, 1000, 1200, and 1400 m above sea level). We found that species richness of both adult trees and seedlings changed with elevation, showing a notable decline in diversity values from 1000 to 1200 m. Tree species composition also demonstrated distinct differences between 1000 and 1200 m, marking the division between tropical seasonal rain forest (800 and 1000 m) and tropical montane evergreen broad-leaved forest (1200 and 1400 m). The results suggested that soil moisture and temperature regimes were associated with elevational distribution of tree species in this region. We also observed that seedlings from certain species found at high elevations were also distributed in low-elevation zones, but no seedlings of species from low elevations were distributed in high-elevation zones. The increase in temperature and droughts predicted for this region may result in the contraction of tropical seasonal rain forest at lower elevations and a downhill shift of higher tropical montane tree species.