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Euterpe edulis Mart. (Arecaceae) is a threatened palm tree of the Brazilian Atlantic Rainforest understory with fundamental importance for the restoration of degraded forest environments. We assessed the leaf gas exchange, growth and survival of E. edulis seedlings transplanted at three different forest sites (S1, S2 and S3) in the same area in which cocoa trees had been cultivated in a rustic agroforestry system. Measurement was carried out during the first year after seedling transplantation. The sites were characterised according to canopy openness (CO) and total daily photosynthetic photon flux density (PPFD). Average CO and PPFD values were 13.3%, 8.0% and 6.7%, and 3.34, 2.79 and 0.62 mol m−2 d−1 for S1, S2 and S3, respectively. A progressive decline in seedling survival was observed in all sites throughout the experiment. At 387 d after planting, survival at S1, S2 and S3 was 57%, 44% and 37%, respectively. The gross light-saturated photosynthetic rate (Amax), leaf area and plant biomass were significantly higher (P < 0.05) in S1 and S2 when compared with S3. The values of dark respiration rate (R d) and photosynthetic compensation irradiance (I c) were sufficiently low for a positive carbon balance. Notwithstanding, the interpretation of results of microclimate variables together with leaf gas exchange and growth variables indicated that seedlings at all sites were in a suboptimal condition to achieve Amax, which is probably the main cause of the dramatic decline in the seedlings’ survival throughout the first year after transplantation. From a practical point of view, if the values of CO and PFD are lower than 10% and 3 mol m−2 d−1, respectively, it is suggested that the transplanting of E. edulis seedlings to the understory of abandoned agroforestry systems be accompanied by cultural practices, such as the thinning and pruning of tree tops. [ABSTRACT FROM AUTHOR]