Land use change is the most widespread driver of biodiversity loss in densely populated tropical countries. Biodiversity loss, in turn, results in changes in functional guilds responsible for various forest ecosystem services. It is thus necessary to understand the extent and types of biodiversity loss and functional guild alteration caused by land use change in order to facilitate sustainable land use policies. Here we study the effects of land use change on forest bird species and guilds in a human-dominated landscape in the Western Himalaya, India. We carried out systematic breeding-season surveys in six land use types within moist temperate forest: natural (protected) oak forest, degraded (lightly used) oak forest, lopped (heavily used) oak forest, pine forest, cultivation and built-up sites, in two adjoining landscapes, over two consecutive years. Our study shows moderate to drastic species loss in all modified land use types in comparison to natural oak forest. Species composition in modified land use types diverged significantly from natural oak; this effect was highest in cultivation and built-up sites and least in degraded forests. Compositional change in modified land uses occurred due to partial replacement of forest specialists with commensals and open country species, whereas abundance of forest generalists was relatively constant across the gradient. We also find a steep decline in the abundance of functional guilds such as pollinators, and insectivorous pest controllers in all modified land uses in comparison to natural oak forest. Our results have important implications for conservation in biodiverse mountain landscapes with significant human imprint. In particular, (a) low faunal diversity in monocultures and urban sites (b) drastic (50% loss or more) loss of forest specialists, pollinators and insectivores in degraded forests, monocultures and urbanised sites; and (c) the potential for degraded forest as refugia for forest species, are findings that can be globally applied to land use and conservation planning in human-dominated landscapes.