Forests are valuable natural resources, beneficial for the storage of carbon, production of oxygen, protection of soil and controlling the water cycle. Despite forests providing different services to the environment, they are being destroyed at an alarming pace. Forest cover change in Murree, Pakistan over the past few years has created different climatic issues. There was a research gap on the detection of forest cover change along with climate variation in the past few years in Murree, so there is a dire need to highlight the above problem in the respective site. Further, it was equally important to keep an eye on the drivers of deforestation to give or suggest solutions accordingly to curb deforestation. The main objectives of this study are to assess forest cover change in subtropical Chir pine forests in Murree, Pakistan over the last 20 years (2001–2021) and to correlate forest cover change with the climatic variables (minimum and maximum temperature and precipitation) of the study area during this time span (2001–2021). This research also intends to identify the main drivers of deforestation in the study area. Five land-use land-cover (LULC) categories are demarcated and classified by applying a supervised classification technique (MLC) through GIS. The accuracy of classified images is assessed and analyzed using KAPPA analysis for the agreement of the image classification. Climatic data are interpolated by empirical Bayesian kriging (EBK) interpolation and it was correlated with forest cover change graphically. Drivers of deforestation are identified through a questionnaire and analyzed in SPSS. The results showed that forest area has decreased 8.26% in Murree from 2001 to 2021. Fuelwood (54%), agriculture expansion (22%), timber production (16%), and urbanization (8%) are recorded as drivers of deforestation in the study area. Climatic variables (maximum and minimum temperature and precipitation) had also shown variation in Murree, as the average maximum temperature has risen 0.26 °C, the average minimum temperature has risen 1.71 °C and annual rainfall has decreased 139.8 mm in the past 20 years (2001–2021), showing that forest decline has caused an increase in temperature and a decrease in rainfall in Murree.