Large quantities of sediments leave the Himalaya through its rivers. These rivers are charged with sediments depending on the types of land use in the watersheds. Land use/cover change and hydrology was studied in a watershed in the Sikkim Himalaya. The land use change from forest and agroforestry to open agriculture has increased by 11% from 1988 to 1992. During the same period substantial areas of dense mixed forests have been converted to open mixed and degraded forests as a result of high pressure on natural resources. Stream ¯ow was highest in the rainy season and lowest in summer season in all the streams and all the three years (1994± 1997) of the study. The water quality of streams from dierent microwatersheds varied signi®cantly between seasons and streams. Sediment and nutrient loss was estimated in microwatersheds and soil loss from the total watershed ranged from 4 . 18 to 8 . 82 t ha À1 yr À1 during the three-year period of study. The annual total nitrogen loss estimated at the watershed outlet was at a rate of 33 kg ha À1 , organic carbon 267 kg ha À1 and total phosphorus 5 kg ha À1 . This study suggests that the upland microwatersheds can be hydroecologically sustainable only if good forest cover and dense forests with large cardamom-based agroforestry are maintained.