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Top‐down and bottom‐up controls regulate the structure and stability of ecosystems, but their relative roles in terrestrial systems have been debated. Here we studied a hydro‐inundated land‐bridge system in subtropical China and tested the relative importance of these two controls in determining the rodent‐mediated regeneration of a locally dominant tree species. Our results showed that both controls operated in terrestrial habitats and that their relative importance switched as habitat size changed. Habitat loss initially removed predators of rodents that released rodent populations and triggered massive seed predation (top‐down control), leading to reduced seedling establishment. A further reduction in habitat size led to decrease in rodent population that was supposed to increase seedling survival of the tree species, but the decline in habitat size deteriorated the abiotic environments (bottom‐up control) that severely prevented seedling recruitment. As the ongoing global land use change is creating increasing number of small‐sized forest fragments, our findings provide novel insights into the restoration of seriously fragmented forests. [ABSTRACT FROM AUTHOR]