Global climate change models predict reduced cloud water in tropical montane forests. To test the effects of reduced cloud water on epiphytes, plants that are tightly coupled to atmospheric inputs, we transplanted epiphytes and their arboreal soil from upper cloud forest trees to trees at slightly lower elevations that are naturally exposed to less cloud water. Control plants moved between trees within the upper site showed no transplantation effects, but experimental plants at lower sites had significantly higher leaf mortality, lower leaf production, and reduced longevity. After the epiphytes died, seedlings of terrestrial gap-colonizing tree species grew from the seed banks within the residual mats of arboreal soil. Greenhouse experiments confirmed that the death of epiphytes can result in radical compositional changes of canopy communities. Thus, tropical montane epiphyte communities constitute both a potentially powerful tool for detecting climate changes and a rich arena to study plant/soil/seed interactions under natural and manipulated conditions. This study also provides experimental evidence that the potential effects of global climate change on canopy and terrestrial communities can be significant for cloud forest biota. Results suggest there will be negative effects on the productivity and longevity of particular epiphytes and a subsequent emergence of an emerging terrestrial component into the canopy community from a previously suppressed seed bank.