Tree density affects species diversity in forest plantations. Understory species diversity, tree regeneration, and soil physicochemical characteristics were assessed under three planting densities of Pinus massoniana in Taizishan Mountains, Hubei, China. There was a higher degree of shrub and herb species diversity in lower density stands. Total species richness was higher for herbs (n = 42) than for shrubs (n = 30) but the two groups exhibited a similar pattern with greater species richness at lower stand density. Changes in community structure and composition were more frequent in high density stands. Community structure in low and medium density stands was more similar to one another than to high stand densities for both herbs and shrubs. The regeneration status of tree species was more abundant in low and medium density stands. Low and medium density stands had significantly more favorable chemical properties such as soil organic matter, total phosphorus, available phosphorus, and nitrogen, as well as on physical soil properties such as non-capillary pores and minimum water holding capacity. Lower planting density was beneficial with regard to natural regeneration, plant species diversity, and soil quality. Reducing tree density of existing high-density P. massoniana plantations can promote both understory plant species diversity and tree regeneration to sustain forest ecosystem services.