The tropical forest cover has varied greatly over the last few decades. The rapid advance of agricultural crops and illegal clearings in natural areas has resulted in the conversion of the majority of the world's forest into desolated patches. Although rates of deforestation have decreased compared to previous years, forest loss still remains a crucial concern. Latest studies conducted on a global scale identified the Latin American continent as one of the regions exhibiting the highest rates of deforestation in the world. The dynamics of forests over the past 40 years has attracted numerous remote-sensing-based studies to monitor forest loss, analyse patterns, and understand the drivers of land conversion. This review article provides a comprehensive overview of the remote-sensing-based studies of tropical forest dynamics in Latin America. Following an introduction with respect to global forest mapping products, a general outline of tropical forest ecoregions and drivers of deforestation in Latin America is provided. Subsequently, a review and categorization of the existing studies is presented, where focus is laid on selected sensors and data analysis methodologies apply. Furthermore, a case study for the whole of Paraguay is presented; Paraguay is a region which contains highly diverse ecosystems that have been ravaged as a result of deforestation over the past 40 years. The main results, challenges, and future needs are discussed.