Research was undertaken to determine how the understory vegetation of Hamilton urban forests compares with reference old-growth forests in rural locations, identify causes for differences, and develop methods to enhance species diversity. Understory vegetation was measured in five rural old-growth forests and compared with 20 urban forests, categorised into four age groups, to assess differences in richness, composition and density. Environmental profiling quantified soil type, nutrient levels, pH, moisture content, understory light transmittance, temperature and vapour pressure deficit of selected forests to identify variation across the forest categories and determine if environmental conditions were the chief cause for vegetative differences. Three native species (Melicytus micranthus, Hedycarya arborea and Coprosma arborea), absent from or less abundant in urban forests, were reintroduced into forest sites to assess their growth, survival and potential for becoming a prominent component in Hamilton City forests. Urban forests displayed reduced native understory diversity comprising only 61.5% of the native understory species found in the rural old-growth forests. Native understory species richness and density decreased from the rural old-growth forest category to the youngest urban forest group. Rural old-growth forests averaged 7.96 species and 41.28 stems per 50 m² compared to 2.68 species and 8.20 stems per 50 m² in the youngest urban forests. The exotic understory stem density trend was reverse. Reduced understory diversity in second-growth and urban forests is widely reported overseas but has not been quantified in New Zealand previously. Soil nutrients and acidity increased from the youngest to the oldest urban forest category. Light transmittance into the understory decreased with forest age from 18.43% in the youngest urban forest group to 4.17% in the rural old-growth forest category during winter and spring. Buffering patterns were evident in rural oldgrowth forests with higher temperatures and vapour pressure deficits outside the forests by as much as 3 ºC and 0.3 kPa respectively during the day, compared to the forest interior. Similar patterns were evident in urban forests during spring but the interior temperatures and vapour pressure deficits were not as low, compared to the rural forests. Environmental profiling proved there were significant differences in environmental conditions between the forest categories and that these were within the range of values reported elsewhere in New Zealand. Survival and growth rates between 77.8 to 100% and 2.7 to 12.1 cm respectively, for the three translocated species over the measured seven months were on par with other New Zealand trials and suggest the selected species can grow and establish viable populations within urban forests. The reintroduction success further indicates that the reduced diversity of urban forests is likely to result from the effects of fragmentation and isolation and urban pressures. Active reintroduction of missing or less abundant native understory species is the best method to improve diversity in Hamilton urban forests. The species experimented with should be included in forest enrichment planting plans as early as 5 to 15 years. Management plans should address active removal of exotic species including methods for manipulation of developing vegetation to favour enhancement of native understory diversity in urban forests.