Tropical rainforest regions have large hydropower generation potential that figures prominently in many nations' energy growth strategies. Feasibility studies of hydropower plants typically ignore the effect of future deforestation or assume that deforestation will have a positive effect on river discharge and energy generation resulting from declines in evapotranspiration (ET) associated with forest conversion. Forest loss can also reduce river discharge, however, by inhibiting rainfall. We used land use, hydrological, and climate models to examine the local "direct" effects (through changes in ET within the watershed) and the potential regional "indirect" effects (through changes in rainfall) of deforestation on river discharge and energy generation potential for the Belo Monte energy complex, one of the world's largest hydropower plants that is currently under construction on the Xingu River in the eastern Amazon. In the absence of indirect effects of deforestation, simulated deforestation of 20% and 40% within the Xingu River basin increased discharge by 4-8% and 10-12%, with similar increases in energy generation. When indirect effects were considered, deforestation of the Amazon region inhibited rainfall within the Xingu Basin, counterbalancing declines in ET and decreasing discharge by 6-36%. Under business-as-usual projections of forest loss for 2050 (40%), simulated power generation declined to only 25% of maximum plant output and 60% of the industry's own projections. Like other energy sources, hydropower plants present large social and environmental costs. Their reliability as energy sources, however, must take into account their dependence on forests.climate change | land-use planning | electricity | climate policy | forest policy T ropical rainforests are globally significant because of their cultural and biological diversity (1), their productivity (2), and their enormous carbon pools (3). The abundant rainfall that has allowed these ecosystems to develop is also associated with large volumes of river water flow and high potential for the generation of electricity through hydropower dams. As a result of this confluence of rainforests and hydropower potential, many nations with large areas of tropical rainforest-including Brazil, Peru, Colombia, the Democratic Republic of the Congo, Vietnam, and Malaysia-plan to expand their hydropower energy capacity over the next 20 y (4, 5).Hydropower is an attractive energy option for many reasons. It is cheaper than thermoelectric power and most other renewable forms of electricity (6), can provide energy at scale more easily and with fewer disruptions than wind or solar (6), and can potentially provide electrical energy with lower levels of greenhouse gas (GHG) emissions than thermoelectric energy (7), although its effect on methane production could counteract this benefit (8). As with any energy source, hydropower also brings important social and ecological costs. Dam construction and flooding that often accompanies reservoir establishment can negatively affe...