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Mountainous communities are facing some profound climatic changes and environmental degradation due to their higher dependence on natural resources. The current study has estimated vulnerability of mountain forests and the provision of forest services to Balakot local community in context of climate change. The study had mapped three integral ecosystem services as provisionary (fuel wood, timber, fresh water), regulatory (protection from natural hazards) and cultural (recreation) through the local community's perception. Carbon stock assessment as a regulatory service of the forest was carried out in the standing trees and from the soil of five selected sites in Balakot. Results have shown that these forests provide myriad of services to their surrounding communities in the form of timber, firewood, climate regulation and recreation etc. In terms of change in delivery of ecosystem services, 66% respondents informed that fuel wood has declined, 82% were of the view that forest cover has been reduced and 83% were agreed that their local forest is important for peace and harmony. The total carbon stock assessment was found to be 243.79 t/ha with an average tree biomass of 207.41 t/ha and the soil carbon of 36.38 t/ha. The study concluded that these forests are playing a vital role for the livelihood of the surrounding community as well as contributing in the climate change impacts mitigation. Therefore, these forest needs to be managed sustainably for the continuity of numerous services to mankind.