Land-cover degradation affects the ability of forests to provide water ecosystem services (ESw). This study explores the forest-water nexus and provides an overview of the water management related to potential hydrological impacts of land-use and land-cover change in the Río Grande de Comitán-Lagos de Montebello watershed in southeastern Mexico. A combination of methods recommended by the Toolkit for Ecosystem Service Site-based Assessment (TESSA), as well as scenario modelling based on an ecological index of riparian quality, were used to assess how alternative reforestation or deforestation scenarios can affect water provision and water quality at different scales. The results indicate that water quality is positively related to forest cover. The effects of terrain and forest-cover conditions on fog inputs and actual evapotranspiration were relevant to increase the water yield under reforestation scenarios. However, strategies for improving the efficient consumption of both green and blue water resources must be considered at a local scale. Deteriorated ESw are also related to inadequate management of water resources in the study area, so water security for local populations requires land-use policies that should consider forest-based solutions, sustainable agricultural practices, and the development of efficient distribution networks for water.