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Plantations, and associated invasions, of exotic Pinus trees occur extensively in the southern hemisphere, threatening the persistence of biodiverse Mediterranean‐climate vegetation. Large‐scale decommissioning of such plantations in the eastern Cape Floristic Region (South Africa) enabled a wide‐ranging study showing successful passive restoration of fynbos vegetation after afforestation. Using a paired study design, we compared the diversity, and floristic and growth‐form composition of post‐fire recovering fynbos in former plantations with that in recently burnt neighboring fynbos in a natural state within the Garden Route National Park. The fynbos of the study area showed good autogenic recovery after several decades of pine afforestation and a fire subsequent to the clearcutting of these trees. On average, native plant abundance and species richness (particularly of shrubs) were significantly lower, and non‐native plant species richness significantly higher, in former plantation areas than in natural fynbos, but these differences were small. Species diversity (Shannon–Wiener index) did not differ significantly between the two vegetation states. The former plantations harbored 91% of the number of native species that the natural fynbos had, while the similarity of the two floras was 65%. Non‐metric multidimensional scaling ordination and multivariate generalized linear models accordingly showed no clear distinction in community composition between the two vegetation states. We concluded that the restoration potential of the montane grassy fynbos in the study area is superior to that previously documented in montane proteoid fynbos, and that fire and invasive alien plant control after clearcutting of the plantations is essential to promote fynbos restoration. [ABSTRACT FROM AUTHOR]