Amazonian deforestation rates are used to determine human effects on the global carbon cycle *RF 1-3* and to measure Brazil's progress in curbing forest impoverishment [1,4,5]. But this widely used measure of tropical land use tells only part of the story. Here we present field surveys of wood mills and forest burning across Brazilian Amazonia which show that logging crews severely damage 10,000 to 15,000 km2 yr-1 of forest that are not included in deforestation mapping programmes. Moreover, we find that surface fires burn additional large areas of standing forest, the destruction of which is normally not documented. Forest impoverishment due to such fires may increase dramatically when severe droughts provoke forest leaf-shedding and greater flammability; our regional water-balance model indicates that an estimated 270,000 km2 of forest became vulnerable to fire in the 1998 dry season. Overall, we find that present estimates of annual deforestation for Brazilian Amazonia capture less than half of the forest area that is impoverished each year, and even less during years of severe drought. Both logging and fire increase forest vulnerability to future burning [6,7] and release forest carbon stocks to the atmosphere, potentially doubling net carbon emissions from regional land-use during severe El Nino episodes. If this forest impoverishment is to be controlled, then logging activities need to be restricted or replaced with low-impact timber harvest techniques, and more effective strategies to prevent accidental forest fires need to be implemented.