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Soil plays an essential role in providing ecosystem services, especially in mountain ecosystems which are often considered as fragile and sensitive systems and commonly consist of a mosaic of forest and rangeland plant communities. The relationship between above-ground plant cover and the properties of soil organic and mineral layers in mountain areas are rarely studied. This research aimed to assess the effect of different land covers (i.e. forest, forest-rangeland ecotone, and rangeland) on soil functional indicators, i.e. fertility and biological activities, in the Hyrcanian region of northern Iran. We hypothesized that (i) the presence of tree cover enhances soil fertility and biological activities and creates hot spots (islands) of soil functional indicators especially in the topsoil, (ii) litter quality and organic matter fractions are the drivers for activities of soil organisms, nutrient cycles and transformation processes in mountain ecosystems. Litter (O-horizon including L, F and H layers) and mineral soil samples (in two separate depths of 0–10 cm and 10–20 cm) were taken using iron frames (30 × 30 cm). In total, 45 litter and 90 soil samples were transferred to the laboratory. Soil characteristic especially in the 0–10 cm depth, litter carbon (C), nitrogen (N) and C/N ratio were significantly affected by different land covers showing the maximum of soil organic C and microbial activity under forest. Our findings showed that the studied land covers, as well as litter and soil properties can be separated by PCA output. The first and second axes, accounted more than 50% of the explained variance in each of the studied soil depths. Soils with a better quality of litter (i.e. lower C/N ratio), higher values for organic matter fractions, soil fertility indicators and soil biological activities can be attributed to the forest. In contrast, positions of low soil fertility indicator values and biota abundance were imposed by forest-rangeland ecotone and rangeland. Although each land cover plays a prominent ecological role and takes its place in the evolutionary process, forests are essential because of their capacity to store and transform carbon and nutrients and to create hotspots identified by functional soil indicators. Based on our findings, soil functions decreased ranked in the order forest > forest-rangeland ecotone > rangeland, which can be assigned to the lower density of trees, and the amount of litter mass and litter quality. It can be concluded that tree covers have a prominent role in increasing soil functions, which should be given special consideration in the restoration of degraded mountain ecosystems.