The Tropical Montane Cloud Forest (TMCF) is a hydrologically unique and highly vulnerable ecosystem to changes in land-use and climate. Assessing the impacts of these changes needs to consider soil-water dynamics. In particular, the organic layer and its functioning requires attention because its difference in water retention characteristics and root density compared to the underlying mineral soils. A higher root density and a higher water storage capacity of the organic layer compared to the mineral soils suggests that most nutrient and water uptake occurs in this layer. However, hydraulic properties of mineral soils and their impact on hydrology of TMCFs have been poorly studied. Here we provide organic layer water retention curves for TMCF soils that were measured in the laboratory. With these data we assessed the potential land-use and climate change impacts on TMCF soil moisture dynamics. From the land-use change perspective, we estimated the water storage capacity loss by slash-and-burn deforestation practices. These estimates show that the storage loss ranges from 35 to 59 mm when TMCFs are converted to pastures. This is several times higher than the estimated TMCF canopy storage capacity (2 to 5 mm). Therefore, the higher peak flow observations in deforested catchments might not only be explained by a decreasing canopy water storage but also likely due to a decreasing soil water storage. From the climate change perspective, we evaluated the effect of contrasting dry season conditions on soil moisture and transpiration using a 1-D water-flow model, and assessed the sensitivity of these hydrological variables to uncertainties in saturated hydraulic conductivity. Although transpiration was not limited by soil moisture during the mild dry season, it was affected during the severe dry season and continued to decline under expected climate change with the prolongation of dry spells. Our results show that the organic layer is a key element in TMCF's hydrological functioning and call for an increased focus on the role of organic soils when evaluating effects of land-use change.