Numerous studies have shown that biodiversity influences the functioning of ecosystems over space and time. The sensitivity of such biodiversity-ecosystem effects to environmental heterogeneity, however, remains poorly understood. In forests, seedling recruitment is a critical phase of forest dynamics, and this phase is highly sensitive to environmental heterogeneity and biotic interactions with surrounding plants. In closed-canopy forests, local variation in light due to variation in canopy cover can result in heterogeneous microenvironments that can enhance or constrain seedling growth and ultimately forest regeneration. Here, we ask, how do light and seedling diversity influence the growth and biomass gain of seedlings in tropical forests? We tested the effects of and interactions between seedling diversity and light availability on the growth of seedlings consisting of tropical broad-leaved evergreen and deciduous forest species using a fully factorial manipulated experiment in the Andaman Islands, India. We compared results from this manipulated experiment with field observations from a long-term forest plot. We show that during the critical seedling establishment phase, species richness and light availability additively increased biomass accumulation of seedlings in communities consisting of evergreen and deciduous species. Moreover, the positive effect of light on biomass gain was consistent across species in these different functional groups. We conclude that the diversity effect on biomass gain is explained more by species complementarity across conditions rather than by compensatory effects by different species under different light conditions or simple probabilistic effects of including faster growing species in species-rich communities. Taken together, our results show that the potential for biodiversity to increase ecosystem functioning in seedling communities is modified by light availability. Although many factors are often important in designing replanting efforts in forest management or restoration, our results suggest that key factors are likely to be the interaction between neighborhood diversity and canopy-mediated light on forest understory, which can be managed to enhance seedling establishment at the early stages of forestry projects aimed at maintaining forest diversity, composition, and functioning.