In Vietnam, rapid deforestation until the 1980s was followed by a period of widespread reforestation. Acclaimed as the first ‘forest transition’ in Southeast Asia, this turn-around resulted from major environmental/socio-economic policy changes (notably land titling), successes in agriculture and planta- tion forestry, and state-led efforts in upland forest protection/restoration. We investigated forest trends after new shifts in forest governance towards more commodity/production orientation, underlining that recent advances are not irreversible. Using official provincial data and applying multivariate statistics, we elicited major factors influencing cover changes of two types of ‘physical forests’ (‘natural forests’ and exotic-species ‘planted forests’), in relation with changes in ‘political forestlands’ of contrasting types (lands designated either for forest ‘protection’ or for wood ‘production’), comparing periods before (2005–2010) and after (2011–2016) the introduction of Payments for Forest Ecosystem Services (PFES) policies. We find that a ‘forest transition’ only continues if the tree plantation boom (now reaching remote/marginal/poor upland provinces) is factored into ‘forest change’. Country-wide natural forest cover decreased slightly since 2006, with however regionally differentiated trends (northern increases versus southern losses, renewed deforestation near population centres). Widespread re-allocation of pro- tection forestlands to production allowed expansion of plantations. Natural forests decreased in pro- vinces where protection forestlands were reduced, and/or where – during 2011–2016 – plantation forests and crop fields expanded. PFES policies exerted minor influences (none to negative) on natural forest cover. PFES funding concentrated on provinces where protection forestlands contracted, and where forestland allocation to households was comparatively undeveloped. Conversely, ‘good governance’ indi- cators were positively correlated with sustained protection of natural forestlands. We conclude that gov- ernance emphasis on forest protection/restoration during the 1990s-2000s [‘transition’] has reverted towards a primacy of forests as spaces of economic production [‘transaction’]. Policy schemes aimed at forest protection and poverty reduction need to incorporate efficient and transparent mechanisms of par- ticipation, monitoring, and adaptive management.