Despite growing concern about the effect of environmental degradation on human health, little effort has been made to quantify the effect of ecosystem damage on the incidence and burden of infectious diseases. Using village-level panel data and satellite data on forest cover, I find that deforestation between 2001-2008 in Indonesia can explain 360,000-880,000 additional malaria infections. The evidence is consistent with an ecological response and the effect of deforestation on malaria cannot be explained by post-deforestation land use change, anti-malarial programs or migration. The effect is specific to malaria, with deforestation having no discernible effect on other diseases whose disease ecology differs from that of malaria. Back of the envelope calculations suggest that the local health benefits from avoided deforestation are 6-31 times the global carbon benefits underscoring a large, yet previously ignored and unquantified cost of deforestation.