Previous studies have indicated how tropical deforestation can have a significant influence on regional and global climate through altered biophysical exchanges of water, energy, and momentum at the land-atmosphere boundary. However, the mechanisms for translating a surface forcing to changes in the atmospheric thermodynamics and circulation have not received as much attention. Here we present a new moist static energy budget method for examining the regional atmospheric response to removal of tropical forests and how land surface forcing is propagated into the atmosphere. A detailed three-dimensional grid cell energy budget approach is used within a coupled atmosphere-biosphere model (Community Climate Model, Version 3--Integrated Biosphere Simulator (CCM3-IBIS)) to identify how land surface forcing affects the regional climate through the vertical and horizontal movement of moist static energy. This approach allows us to clearly identify where the moist static energy budget changes, which mechanisms are responsible for the changes, and how energy moves to adjacent areas and affects rainfall. Generally, replacement of the tropical forests with bare soil in the model leads to decreased rainfall in the tropics due to regional drying, while enhanced rainfall occurs in the subtropics associated with strengthened monsoon winds importing more moisture. Interesting regional complexities emerge, notably in tropical Africa. There, removal of the forests leads to lower rainfall near the coast but enhanced rainfall in central tropical Africa. This approach provides a useful diagnostic tool for examining the implications of land use and land cover change on the regional and global atmospheric thermodynamics and circulation.