We test the validity of applying the alternative stable state paradigm to account for the landscape-scale forest/non-forest mosaic that prevails in temperate Tasmania, Australia. This test is based on fine-scale pollen, spore, and charcoal analyses of sediments located within a small patch of non-forest vegetation surrounded by temperate forest. Following nearly 500 years of forest dominance at the site, a catastrophic fire drove an irreversible shift from a forested Cyperaceae-Sphagnum wetland to a non-forested Restionaceae wetland at ca. 7000 calibrated (cal) yr BP. Persistence of the non-forest/Restionaceae vegetation state over 7000 years, despite long fire-free intervals, implies that fire was not essential for the maintenance of the non-forest state. We propose that reduced interception and transpiration of the non-forest state resulted in local waterlogging, presenting an eco-hydrological barrier to forest reestablishment over the succeeding 7000 years. We further contend that the rhizomatous nature of the non-forest species presented a reinforcing eco-physical barrier to forest development. Our results satisfy a number of criteria for consideration as an example of a switch between alternative stable states, including different origin and maintenance pathways, and they provide insights into the role of threshold dynamics and hysteresis in forest-non-forest transitions.