As one of the countries which has been experiencing a forest transition, China provides important insights into and theoretical and empirical knowledge of forest transition. In this study, through the framework of Sustainable Livelihood Analysis (SLA) and questionnaire surveys, we examined forest transition, farmers’ land-use activities and livelihood changes in Chicheng county, a typical mountainous area in Northern China, during 1975–2018. Most villages of Chicheng county experienced forest transition during the period of 2003–2005, but some villages experienced forest transition in 2010–2015. Forest transition variation over time was influenced by land use and livelihood changes. Livelihood resources, policy and institutional constraints and livelihood strategies had significant influences on land use and then caused variation in forest transition characteristics. The process of “livelihood–land use–forest transition” was the key to achieving and maintaining forest transition, and the interaction between livelihood and land use was a negative feedback relationship between society and ecology. The dominant path of forest transition in Chicheng county was the “economic development path”. Moreover, the “intensive agriculture path of small-scale farmers” enhanced the “economic development path”, and the “forest scarcity path” promoted both of the above two paths. This implies that the feedback and interactions between society and ecology should be taken into account so as to achieve a sustainable human and environmental system.