Paramo is a term used to describe tropical alpine vegetation between the continuous timberline and the snow line in the Northern Andes. Paramo environments provide important species habitat and ecosystem services. Changes in spatial extent of the paramo ecosystem at Pambamarca in the Central Cordillera of the northern Ecuadorian Andes were analysed using multi-temporal Landsat TM/ETM+ satellite data. The region suffered a loss of 1826.6 ha or 20% of the total area at a rate of 100 ha/annum during 1988-2007 period. It is found that permanent paramo cover decreased from 8350 ha in 1988 to 5864 ha in 2007 at a fairly constant rate (R²=0.94). This loss is attributed to expansion of commercial agriculture and floriculture in the valleys coupled with increased population pressure. Land at higher elevations has been cleared for small scale agriculture. Loss of the paramo ecosystem will exert a number of negative impacts on ecosystem services and livelihoods of the local population at Pambamarca.