Kodagu district in South India is the largest coffee producing region in India contributing to 35% of the production under shade grown system. These diverse coffee plantations which cover 30% of the landscape in the region not only provide valuable economic gains to the community but also provide vital ecosystem services to the Southern India since the most important river of South India Cauvery originates here and coffee plantations cover a large area in the watershed. With the opening of the coffee markets and related intensification of coffee production the highly diverse coffee based agro forestry systems are losing the tree cover and tree diversity and could transform to system with few native trees and exotic fast growing trees like Silver Oak (Grevillea robusta). To address some of the issues related to loss of diversity and to promote sustainable coffee cultivation project CAFNET (Coffee Agroforestry Network) was launched in 2007 in 7 countries. In this project funded by European Union and coordinated by CIRAD France efforts are underway to strengthen ecological reasoning and to improve the business skills of farmers to negotiate access to payments for environmental services. Kodagu district is the only CAFNET site in India and multidisciplinary team of researchers are undertaking studies in 38 villages in the Cauvery Watershed region. Ecological and Socio-economic studies are being undertaken for the first time in the region to document and value the ecosystem services being offered by coffee based agroforestry systems. Efforts are underway to educate farmers and to form groups to add value to coffee through eco certification. This multi disciplinary study will help in providing much needed information on role of coffee plantations in providing key ecosystem services and to formulate guidelines for sustainable coffee cultivation and help the farmers through value addition and better access to markets.