Abies religiosa is native to southern Mexico and western Guatemala at high altitudes: 2100m to 4100m (or thereabouts). According to the Gymnosperm Database entry for Abies religiosa, its common name of sacred fir is due to "its widespread use in Mexico to create decorations for use at religious festivals, especially Christmas", though others have suggested it is because the tips of the branches form a cross. The common name of oyamel fir tends to be more widely-used in popular texts about the species, particularly with regard to its ecology and its relationship with the monarch butterfly, Danaus plexippus.
The oyamel fir forests of Mexico are the wintering grounds for the monarchs of eastern North America, where the insects can be found in densities of 10 million individuals / hectare (4 million individuals / acre). While the species Abies religiosa itself is in no conservation danger, deforestation (ranging from illegal clearcut logging to thinning of trees -- see this documentary on illegal logging near the monarch reserves) is altering the ecological conditions of the oyamel fir forest such that the monarchs may one day no longer find suitable wintering habitat. Journey North explains the ecological requirements of the wintering monarchs in point form: The Monarch's Forest Ecosystem: Mexico's Oyamel Fir Forest. Simply put, deforestation is changing the humidity and temperature regime of the forest, such that the monarchs will not be able to meet their physiological requirements for wintertime survival.
You can learn more about monarch butterflies from these valuable sites: MonarchLIVE, the monarch butterfly page from Canadian Biodiversity (discusses threats and monarch migration) and Monarch Watch (blog) (these great folks also could use a little bit of financial help, if you're so inclined).
Ah, one last thing -- I apologize about the quality of the photographs. I forgot my polarizing filter for this trek to see the butterflies so the photographs have a lot of glare. I also wish I could've taken better photographs of the firs, but the butterflies kept getting in the way. Perhaps these videos I took will make up for it (one thing to note in the videos -- what appear to be solid masses of black shaded foliage are actually clusters of butterflies resting on the branches):