China manages the largest monoculture plantations in the world, with 24% being Chinese fir plantations. Maximizing the ecosystem services of Chinese fir plantations has important implications in global carbon cycle and biodiversity protection. Assisted natural regeneration (ANR) is a practice to convert degraded lands into more productive forests with great ecosystems services. However, the quantitative understanding of ANR ecosystem service benefits is very limited. We conducted a comprehensive field manipulation experiment to evaluate the ANR potentials. We quantified and compared key ecosystem services including surface runoff, sediment yield, dissolved organic carbon export, plant diversity, and aboveground carbon accumulation of ANR of secondary forests dominated by Castanopsis carlesii to that of Chinese fir and C. carlesii plantations. Our results showed that ANR of C. carlesii forest reduced surface runoff and sediment yield up to 50% compared with other young plantations in the first 3 years and substantially increased plant diversity. ANR also reduced the export of dissolved organic carbon by 60–90% in the first 2 years. Aboveground biomass of the young ANR forest was approximately 3–4 times of that of other young plantations, while aboveground biomass of mature ANR forests was approximately 1.4 times of that of mature Chinese fir plantations of the same age. If all Chinese fir plantations in China were replaced by ANR forests, potentially 0.7 Pg more carbon will be stored in aboveground in one rotation (25 years). The results indicate that ANR triggers positive feedbacks among soil and water conservation, biodiversity protection, and biomass accumulation and thereby enhances ecosystem services.