The Shorea robusta Gaertn.f. forests of Nepal represent a highly valuable resource for both local communities and regional industry. Timber productivity of plantations in the Terai is well known; alternative management scenarios for Terai sal forests should be considered in terms of biodiversity conservation and potential impacts on community livelihood. This study investigated the regeneration of sal forest recovering from two forest management strategies in the Terai of Nepal: clearcutting and abandonment (successional), and clearcutting followed by the establishment and protected regeneration in Eucalyptus camaldulensis plantations (taungya). We report three principal findings. First, even though total tree abundances in all treatments were high, all species except S. robusta exhibited decreased abundances in managed forest after 20 years of protected regeneration. This effect was particularly evident in regenerating plantations. Second, successional sal forest recovered most of the species richness in 20 years, even though most tree species were in lower abundances. Third, the contribution of abandoned plantations to rural livelihoods would be linked with the plantation species only, whereas successional sal forest would provide a wider array of livelihood resources. In general, these results corroborate the existing literature on Shorea forest management and regeneration in the Terai indicating a severe decline in botanical diversity in taungya forest, and robust regeneration of Shorea populations during natural forest management in Nepal. Although sal forests may provide a wider variety of livelihood products, a full analysis of forest 'value' must be undertaken to establish the optimal land use systems in the Terai.