Forest Transition Theory (FTT) suggests that reforestation may follow deforestation as a result of and interplay between changing social, economic and ecological conditions. We develop a simplistic but empirically data driven land use transition agent-based modeling platform, interactive land use transition agent-based model (ILUTABM), that is able to reproduce the observed land use patterns and link the forest transition to parcel-level heuristic-based land use decisions and ecosystem service (ES). The ILUTABM endogenously links landowners’ land use decisions with ecosystem services (ES) provided by the lands by treating both lands and landowners as interacting agents. The ILUTABM simulates both the land use changes resulting from farmers’ decision behaviors as well as the recursive effects of changing land uses on farmers’ decision behaviors. The ILUTABM is calibrated and validated at 30 m × 30 m spatial resolution using National Land Cover Data (NLCD) 1992, 2001 and 2006 across the western Missisquoi watershed, which is located in the north-eastern US with an estimated area of 283 square kilometers and 312 farmers farming on 16% of the total Missisquoi watershed area. This study hypothesizes that farmers’ land use decisions are made primarily based on their summed expected utilities and that impacts of exogenous socio-economic factors, such as natural disasters, public policies and institutional/social reforms, on farmers’ expected utilities can significantly influence the land use transitions between agricultural and forested lands. Monte Carlo experiments under six various socio-economic conditions combined with different ES valuation schemes are used to assess the sensitivities of the ILUTABM. Goodness-of-fit measures confirm that the ILUTABM is able to reproduce 62% of the observed land use transitions. However, the spatial patterns of the observed land used transitions are more clustered than the simulated counterparts. We find that, when farmers value food provisioning Ecosystem Services (ES) more than other ES (e.g., soil and water regulation), deforestation is observed. However, when farmers value less food provisioning than other ES or they value food provisioning and other ES equally, the forest transition is observed. The ILUTABM advances the Forest Transition Theory (FTT) framework by endogenizing the interactions of socio-ecological feedbacks and socio-economic factors in a generalizable model that can be calibrated with empirical data.