Tropical reforestation initiatives are widely recognized as a key strategy for mitigating rising atmospheric CO2 concentrations. Although rapid tree growth in young secondary forests and plantations sequesters large amounts of carbon (C) in biomass, the choice of tree species for reforestation projects is crucial, as species identity and diversity affect microbial activity and soil C cycling via plant litter inputs. The decay rate of litter is largely determined by its chemical and physical properties, and trait complementarity of diverse litter mixtures can produce non-additive effects, which facilitate or delay decomposition. Furthermore, microbial communities may preferentially decompose litter from native tree species (homefield advantage). Hence, information on how different tree species influence soil carbon dynamics could inform reforestation efforts to maximize soil C storage. We established a decomposition experiment in Panama, Central America, using mesocosms and litterbags in monoculture plantations of native species (Dalbergia retusa Hemsl. and Terminalia amazonia J.F.Gmel., Exell) or teak (Tectona grandis L.f.) to assess the influence of different litter types and litter mixtures on soil C dynamics. We used reciprocal litter transplant experiments to assess the homefield advantage and litter mixtures to determine facilitative or antagonistic effects on decomposition rates and soil respiration in all plantation types. Although litter properties explained some of the variation in decomposition, the microclimate and soil properties in the plantations also played an important role. Microbial biomass C and litter decomposition were lower in Tectona than in the native plantations. We observed non-additive effects of mixtures with Tectona and Dalbergia litter on both decomposition and soil respiration, but the effect depended on plantation type. Further, there was a homefield disadvantage for soil respiration in Tectona and Terminalia plantations. Our results suggest that tree species diversity plays an important role in the resilience of tropical soils and that plantations with native tree species could help maintain key processes involved in soil carbon sequestration.