The Republic of Palau lies in the high rainfall (3800 mm/yr) zone of the tropical western Pacific Ocean. Hilly topography developed from Eocene age volcanic rocks on the largest island Babeldaob. Forest clearing about 3400 BP resulted in formation of grasslands. Forest accounts for about seventy seven percent of Babeldaob land cover. Grasslands, which includes degraded areas covered by ferns, currently account for about twenty percent of the land cover on Babeldaob. Grasslands are maintained through frequent burning. The soils that have formed under these conditions are Typic Haploperox under forest and grassland, and Typic Kandiperox on eroded ridges supporting mostly ferns. Soil properties reflect human manipulation of the vegetation. From initial forested conditions topsoil organic matter decreases by about fifty percent under grass cover and by about eighty percent under fern cover. Soil Organic Matter (SOM) is the key to agricultural sustainability as the halloysite and oxide dominated soil mineralogy has little capacity to hold nutrients. Cation Exchange Capacity (CEC) and the amount of bases (Ca, Mg, K) on the exchange complex are directly related to SOM content. Soil reaction (pH) is in the range of 4.9 to 5.3 for these soils regardless of vegetation. Aluminum generally becomes soluble below pH 5.2. All soils have high soluble aluminum (60 to 90 percent) except for the forest topsoil, which has only one percent aluminum but sixteen percent SOM. The amount and/or kind of SOM appear to lower the soluble aluminum level. SOM also appears to interfere with phosphorus sorption. Topsoils generally have twenty to thirty percent less P-sorption than subsoils with lower SOM contents. Reclamation of a degraded Kandiperox was attempted through a single application of fertilizer (10-30-10), lime (2000 lbs/acre) and addition of mulch (chipped tree stems applied 5 to 8 cm thick) and grass and other groundcover seeds. Five years after treatment application soils in the test plots had noticeably darkened topsoils about 2 to 3 cm thick. Subsequent analyses showed that soil fertility parameters approached those of the native forest condition. Highly weathered soils in the humid tropics have low resilience. Nearly all soil fertility resides in the topsoil. Loss of topsoil leads to a downward spiral of land degradation that is difficult to recover from. Management of degraded soils often means application of synthetic fertilizers but the soils have little capacity to retain these nutrients and pollution of downstream waters is likely. Additions of carbon to the soil are the means to sustaining soil health and productivity.