Differing perceptions of the impacts on hydrological functions of tropical forest clearance and conversion to other land uses have given rise to growing and often heated debate about directions of public environmental policy in southeast Asia. In order to help bring more balance and clarity to such debate, this paper reviews a wide range of available scientific evidence with respect to the influence exerted by the presence or absence of a good forest cover on regional climate (rainfall), total and seasonal water yield (floods, low flows), as well as on different forms of erosion and catchment sediment yield under humid tropical conditions in general and in southeast Asia in particular. It is concluded that effects of forest disturbance and conversion on rainfall will be smaller than the average decrease of 8% predicted for a complete conversion to grassland in southeast Asia because the radiative properties of secondary regrowth quickly resemble those of the original forest again. In addition, under the prevailing 'maritime' climatic conditions, effects of land-cover change on climate can be expected to be less pronounced than those of changes in sea-surface temperatures. Keywords: Climate, Deforestation, Erosion, Flow Regime, Humid tropics, Hydrology, Reforestation, Sediment yield, Stormflow, Water yield, Watershed Management.