Soil compaction has become a global problem affecting soil worldwide. With an increased population, more demands for food and wood have resulted in intensive cultivation and increased mechanization of our farmlands and irrigated plantations. The use of heavy machinery results in soil compaction, which affects the entire soil ecosystem. This study was conducted to analyze the impact of compacted soil on germination and initial growth stages of four major agro-forest trees of central Punjab, Pakistan. Morpho-physiological traits of all selected species ( , and ) were measured against soil compaction. Results indicated that the root and shoot length, biomass, root-shoot ratio, diameter at root collar, no. of leaves and branches, leaf area, germination, and survival %, and physiological traits (i.e., photosynthetic rate, transpiration rate, stomatal conductance, internal CO concentration, and photosynthetic water use efficiency) were significantly affected by the induced soil compaction. Dehnh. performed better and exhibited 96% germination percentage under (1.40 mg m ) compaction level and gradually decreased by 11% with the increase of compaction level (1.80 mg m ). It shows that the shorter roots developed due to soil compaction decreased water use efficiency, photosynthesis, and whole-plant physiological performance. The findings concluded that judicious use of machinery is highly desired for sustainable and good-quality wood production from farm trees.