Climate change has become a prominent topic, particularly regarding plant adaptation and migration within mountain ecosystems. This study aimed to clarify forest dynamics by focusing on sapling and tree stages in relation to microclimate changes across a permanent plot along an altitudinal gradient. In 2012, a permanent transect plot (50 m × 600 m) was established at the forest ecotone between the deciduous dipterocarp forest (DDF) and lower montane forest (LMF). All trees with a diameter at breast height ≥ 1 cm were tagged, measured, and identified. Monitoring occurred every 2 years between 2012, 2014, 2016, and 2018, with a final census conducted in 2023. Microclimatic factors were recorded automatically, and rainfall data were obtained from a meteorological station. The dynamics of all trees were analyzed in relation to micro-climate changes. Our results showed that environmental changes significantly affected species coexistence, particularly in the forest ecotone between the DDF and LMF, where intermediate environmental factors were observed. High mortality rates were observed in the dominant evergreen species, with significant positive correlations with decreased rainfall and increased temperature, suggesting that drought conditions strongly influence tree mortality. In contrast, the deciduous species showed increased density, particularly in the forest ecotone zone, indicating their better adaptation to drought conditions and their potential to occupy the forest ecotone at a higher rate than LMF species. Understanding the ecological niches of coexisting species along altitudinal gradients is crucial for developing effective restoration programs in mountainous ecosystems.