Tropical agro-forest landscapes are global priority areas for biodiversity conservation. Little is known about the ability of these landscapes to sustain large late successional forest trees upon which much forest biodiversity depends. These landscapes are subject to fragmentation and additional habitat degradation which may limit tree recruitment and thus compromise numerous ecosystem services including carbon storage and timber production. Dysoxylum malabaricum is a large canopy tree species in the Meliaceae, a family including many important tropical timber trees. This species is found in highly fragmented forest patches within a complex agro-forest landscape of the Western Ghats biodiversity hot spot, South India. In this paper we combined a molecular assessment of inbreeding with ecological and demographic data to explore the multiple threats to recruitment of this tree species. An evaluation of inbreeding, using eleven microsatellite loci in 297 nursery-reared seedlings collected form low and high density forest patches embedded in an agro-forest matrix, shows that mating between related individuals in low density patches leads to reduced seedling performance. By quantifying habitat degradation and tree recruitment within these forest patches we show that increasing canopy openness and the increased abundance of pioneer tree species lead to a general decline in the suitability of forest patches for the recruitment of D. malabaricum. We conclude that elevated inbreeding due to reduced adult tree density coupled with increased degradation of forest patches, limit the recruitment of this rare late successional tree species. Management strategies which maintain canopy cover and enhance local densities of adult trees in agro-forest mosaics will be required to ensure D. malabaricum persists in these landscapes. Our study highlights the need for a holistic understanding of the incipient processes that threaten populations of many important and rare tropical tree species in human dominated agro-forest landscapes.