Laetoli, in northern Tanzania, is one of the most important paleontological and paleoanthropological sites in Africa. Apart from Hadar, it has yielded the largest sample of specimens attributable to the mid-Pliocene hominin, Australopithecus afarensis, including the type specimen. As such, it is important to explore the paleoenvironment at Laetoli, especially the different habitat types that may have been exploited by A. afarensis. Previous interpretations of the paleoecology at Laetoli have led to quite different conclusions. Initially, the paleoenvironment was reconstructed as an arid to semi-arid grassland with scattered bush and tree cover, and patches of acacia woodland, similar to the modern-day local setting. However, some aspects of the fauna do indicate that the range of habitats may have included more dense bush cover and more extensive tracts of woodland than seen in the region today. The main objective of this paper is to re-examine this issue by more thoroughly documenting the paleoecological setting by conducting a more detailed and comprehensive comparative analysis of the mammalian fauna. To this end, the ecovariable structure of the mammalian fauna at Laetoli is compared to other Plio-Pleistocene homininbearing fossil localities and modern faunal communities from different habitats, including forest, woodland, open woodland, bushland, shrubland, grassland, and desert. Principal components analysis (PCA) and bivariate analyses of predictor ecovariables were conducted. An important finding was the general distinctiveness of fossil assemblages, including Laetoli, from modern communities. Terrestrial mammals were found to have the greatest impact on the uniqueness of fossil communities, with fossil assemblages having very high proportions of terrestrial mammals when compared to modern communities. Furthermore, the high frequency of grazers and terrestrial mammals, combined with the low occurrence of arboreal and frugivorous mammals at Laetoli, indicates affinities with modern mammalian communities living in grassland, savanna, and open woodland settings. Taking into account the results of this study, and the presence of indicator species, we reconstruct the paleoecology of the Upper Laetolil Beds as a mosaic habitat dominated by grassland and shrubland, with areas of open- to medium-cover woodlands, as well as some closed woodland and possibly gallery forest along seasonal river courses.