Pugu Forest Reserve is among coastal forests in Tanzania which is highly degraded through exploitation. To conserve the forest, part of natural forest was cleared and established exotic plantation to provide forest resource needs for the nearby residents. However, the regeneration pattern of indigenous trees in the exotic plantation was not monitored. It was aimed at assessing diversity, population structure, size class distribution and natural regeneration pattern of indigenous trees in exotic tree plantation. Vegetation data was collected using nested plots established along transects on both exotic tree plantation and the natural forest. The diameter size classes for most trees were less than 25 cm with poor recruitment at lower size classes implying an unstable plant population structure. Significant difference existed on the abundance of indigenous plant species between those in exotic tree plantation and the natural forest. However, the indigenous plant species regenerated successfully in exotic tree plantation as it occurred in the natural forest. Conclusively, establishing exotic plantation through clearing natural forests required monitoring as a management strategy because indigenous woody plants recovered through natural regeneration and outcompeted exotic trees in the plantation.