Background: The slopes of the eastern Andes harbour some of the highest biodiversity on Earth and a high proportion of endemic species. However, there have been only a few and limited descriptions of carbon budgets in tropical montane forest regions. Aims: We present the first comprehensive data on the production, allocation and cycling of carbon for two high elevation (ca. 3000 m) tropical montane cloud forest plots in the Kosñipata Valley, Peruvian Andes. Methods: We measured the main components and seasonal variation of net primary productivity (NPP), autotrophic (R a) and heterotrophic (R h) respiration to estimate gross primary productivity (GPP) and carbon use efficiency (CUE) in two 1-ha plots. Results: NPP for the two plots was estimated to be 7.05 ± 0.39 and 8.04 ± 0.47 Mg C ha-1 year-1, GPP to be 22.33 ± 2.23 and 26.82 ± 2.97 Mg C ha-1 year-1 and CUE was 0.32 ± 0.04 and 0.30 ± 0.04. Conclusions: We found strong seasonality in NPP and moderate seasonality of R a, suggesting that forest NPP is driven by changes in photosynthesis and highlighting the importance of variation in solar radiation. Our findings imply that trees invest more in biomass production in the cooler season with lower solar radiation and more in maintenance during the warmer and high solar radiation period. © 2014 Copyright 2013 Botanical Society of Scotland and Taylor & Francis.