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While tropical deforestation remains widespread, some countries experienced a forest transition—a shift from net deforestation to net reforestation. Costa Rica had one of the highest deforestation rates in the 1980s and is now considered as a model of environmental sustainability, despite being a major producer of bananas and pineapples. We tested three land use processes that are thought to facilitate forest transitions. First, forest transitions may be accompanied by land use displacement through international trade of land-based products, which may undermine the global-scale environmental benefits of national forest protection. Second, reforestation is often associated with land use intensification in agriculture and forestry, allowing for land sparing. Third, this intensification may partly result from a geographical redistribution of land use at the sub-national scale to better match land use with land suitability. These hypotheses were verified for Costa Rica's forest transition. We also tested whether forest increased mainly in regions with a low ecological value and agriculture expanded in regions with a high ecological value. Intensification and land use redistribution accounted for 76% of land spared during the forest transition, with 32% of this spared area corresponding to net reforestation. Decreasing meat exports led to a contraction of pastures, freeing an area equivalent to 80% of the reforested area. The forest transition in Costa Rica was environmentally beneficial at the global scale, with the reforested area over 1989–2013 corresponding to 130% of the land use displaced abroad through imports of agricultural products. However, expansion of export-oriented cropland caused deforestation in the most ecologically valuable regions of Costa Rica. Moreover, wood extraction from forest plantations increased to produce the pallets needed to export fruits. This highlights the importance of a multi-scale analysis when evaluating causes and impacts of national-scale forest transitions.