Ecosystem functioning is an intricate web of interactions among living organisms and their physical environment, which is vital for maintaining ecological balance. This chapter explores the impact of forest degradation, primarily driven by factors such as forest fires, shifting cultivation, and climate change, on ecosystem functioning. The impact of fire on ecosystem functioning in India, where approximately 90% of forest fires are attributed to human activities, underscores the need for preventive measures and fire-prone zone designation. Forest fires significantly contribute to biodiversity loss, soil carbon depletion, and alterations in ecosystem processes, affecting net primary production, decomposition rates, and nutrient cycles. Globally, uncertainty in forecasting fire frequency poses long-term threats to the carbon cycle and climate, as evidenced by consistent losses in soil carbon and nitrogen in frequently burnt regions. The recovery of fire-prone ecosystems takes up to 20 years, with resilient microbial communities aiding in restoring key ecosystem functions. Shifting cultivation, a common practice in north-eastern India, significantly alters nutrient cycling, leading to soil quality and biodiversity deterioration. Habitat loss-altered vegetation structure and shifts in bird species richness are among the multifaceted effects. The degradation of oak forests in the Indian Central Himalayas, driven by anthropogenic activities, adversely affects ecosystem structure and functioning, including reduced soil carbon, altered plant biomass, and decreased photosynthesis rates. Strategies for preventing forest degradation, including afforestation, community participation, and global initiatives like Reducing Emissions from Deforestation and Forest Degradation (REDD+), are crucial for sustaining healthy ecosystems. Restoration approaches focusing on biodiversity and functional diversity play key roles in enhancing ecosystem functionality.