Background Tropical montane cloud forests (TMCFs) are characterized by a unique set of biological and hydroclimatic features, including frequent and/or persistent fog, cool temperatures, and high biodiversity and endemism. These forests are one of the most vulnerable ecosystems to climate change given their small geographic range, high endemism and dependence on a rare microclimatic envelope. The frequency of atmospheric water deficits for some TMCFs is likely to increase in the future, but the consequences for the integrity and distribution of these ecosystems are uncertain. In order to investigate plant and ecosystem responses to climate change, we need to know how TMCF species function in response to current climate, which factors shape function and ecology most and how these will change into the future. Scope This review focuses on recent advances in ecophysiological research of TMCF plants to establish a link between TMCF hydrometeorological conditions and vegetation distribution, functioning and survival. The hydraulic characteristics of TMCF trees are discussed, together with the prevalence and ecological consequences of foliar uptake of fog water (FWU) in TMCFs, a key process that allows efficient acquisition of water during cloud immersion periods, minimizing water deficits and favouring survival of species prone to drought-induced hydraulic failure. Conclusions Fog occurrence is the single most important microclimatic feature affecting the distribution and function of TMCF plants. Plants in TMCFs are very vulnerable to drought (possessing a small hydraulic safety margin), and the presence of fog and FWU minimizes the occurrence of tree water deficits and thus favours the survival of TMCF trees where such deficits may occur. 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