This paper contributes to an enhanced understanding of present climatic conditions, observed climate trends and regional climate vulnerability of the Bhutan Himalayas. Bhutan’s complex, often high-altitude terrain and the severe impact of the Indian summer monsoon leads to a strong exposure of the countries’ key economic sectors (agriculture, forestry, hydropower generation and tourism) to climatic changes. Climate change also threatens Bhutan’s vast biodiversity and increases the likelihood of natural hazards (e.g. glacier lake outburst floods, flash floods, droughts and forest fires). A better understanding of Bhutan’s climate and its variability, as well as observed and possible climate impacts, will help in improving the handling of regional social, economic and ecologic challenges not limited to the Himalayas. Only a few climatological studies exist for the eastern Himalayas. They mainly focus on adaptation to immediate threats by glacier lake outbursts. In contrast, this paper (1) investigates the average spatial and inner-annual diversity of the air temperature regime of Bhutan, based on local meteorological observations, (2) discusses past temperature variability, based on global datasets, and (3) relates effects of observed warming to water availability, hydropower development, natural hazards, forests, biodiversity, agriculture, human health and tourism in the Bhutan Himalayas. Results indicate a large spatial and temporal temperature variability within Bhutan and considerably increasing temperatures especially over recent decades. Implications of regional climatic changes on various socio-economic sectors and possible adaptation efforts are discussed.