Cloud forests are of great importance for the hydrological functioning of watersheds in sub-humid East Africa. However, the montane forests of Mt. Kilimanjaro are heavily threatened, at lower elevations by illegal logging and at higher elevations by an increasing fire risk. Based on an evaluation of over 1400 vegetation plots and interpretation of satellite imagery from 1976 and 2000, land-cover changes on Kilimanjaro were evaluated and their impact on the water balance estimated. In recent years, a drier climate has facilitated the spreading of human-caused fires dramatically, and has led to the almost complete destruction of the former closed forest between 3000 m.a.s.l. and the potential tree-line at 4000 m.a.s.l. Therefore, the current upper closed forest limit at 3200 m.a.s.l. has become suppressed by nearly 800 m. Since 1976, about 150 km2 of cloud forests have been destroyed by fire, possibly representing an estimated annual loss of 20 million m3 of water potentially captured by “fog stripping” under forested conditions. Such losses are potentially much more harmful hydrologically speaking than those associated with the loss of the showy ice cap on Kilimanjaro and highlight the importance of quantitative hydrological investigations in support of montane forest conservation and management in the region.