Reducing the risk of large, severe wildfires while also increasing the security of mountain water supplies and enhancing biodiversity are urgent priorities in western US forests. After a century of fire suppression, Yosemite and Sequoia-Kings Canyon National Parks located in California’s Sierra Nevada initiated programs to manage wildfires and these areas present a rare opportunity to study the effects of restored fire regimes. Forest cover decreased during the managed wildfire period and meadow and shrubland cover increased, especially in Yosemite’s Illilouette Creek basin that experienced a 20% reduction in forest area. These areas now support greater pyrodiversity and consequently greater landscape and species diversity. Soil moisture increased and drought-induced tree mortality decreased, especially in Illilouette where wildfires have been allowed to burn more freely resulting in a 30% increase in summer soil moisture. Modeling suggests that the ecohydrological co-benefits of restoring fire regimes are robust to the projected climatic warming. Support will be needed from the highest levels of government and the public to maintain existing programs and expand them to other forested areas.