Recent studies have shown that there has been a reduction in dry season moisture input from direct interception of cloud water and wind-blown mist at the lee edge of the Monteverde cloud forest, Costa Rica, since the mid 1970s. This reduction of moisture could be responsible for the population crashes of anurans observed in the region. It has been hypothesized that this behavior is a result of increases in cloud base height, linked to increased sea surface temperatures. In this study we present a complementary hypothesis, that deforestation upwind of the Monteverde cloud forest preserve is responsible for the observed changes in cloud base height. An automated cumulus cloud classification scheme extracts monthly spatial maps of the frequency of occurrence of cumulus cloudiness over Costa Rica from GOES 8 visible channel satellite imagery. We find that cumulus cloud formation in the morning hours over deforested regions is suppressed compared to forested areas. The degree of suppression appears to be related to the extent of deforestation. This difference in cloud formation between forested and deforested areas is a clear signal of land use change influencing the regional climate. Regional Atmospheric Modeling System numerical modeling simulations are used to explore the differences in cloud field characteristics over the lowland pasture and forest landscapes. Statistically significant differences in cloud base height and cloud thickness occur between the forest and pasture simulations. Clouds have higher base heights and are thinner over pasture landscapes than over forested ones. On the other hand, these simulations show no statistically significant differences in cloud top heights, cloud cover, mean cloud water mixing ratio, or cloud liquid water path between pasture and forest simulations. However, in the simulations there are enhanced sensible heat fluxes and reduced latent heat fluxes over pasture compared to forest. It is the drier and warmer air over pasture surfaces that results in the formation of elevated thinner clouds. This study suggests that deforestation results in warmer, drier air upwind of the Monteverde cloud forests and that this could influence the base height of orographic cloudbanks crucial to the region during the dry season.