This study was conducted in the Knuckles Forest Region in central Sri Lanka, and investigated how termite species richness, abundance and functional group diversity vary in different montane forest types and identified the likely causes of this pattern. Termite diversity declined with increased elevation, with upper montane forests recording a single endemic species, Postelectrotermes militaris Desneux. Transect sampling in lower montane forests yielded 26 species, with a higher number from dry forests (22 species) than from wet forests (15 species). Species specificity also was high in dry forests (11 species) compared with wet forests (four species). Termite abundance did not show a distinct trend in dry and wet forests. Live-wood termites were present only in upper montane and high-altitude lower montane dry forests. Wet forests had a higher relative abundance (78%) but not species richness (40%) of soil and soil–wood interface feeders. In dry forests, both species richness (82%) and abundance (88%) of fungus-growing wood feeders were higher. The study suggests that key drivers of the species distribution pattern are low temperature and differing forest floor conditions. In the upper montane forest floor where earthworms dominate, wet soil and damp, woody litter riddled with beetles are not favourable for termites. In lower montane wet forests, moist, thick decomposing leaf litter and in dry forests, drier, relatively undecomposed leaf litter with many dry sticks and branches support species with specific food habits.