High-elevation grasslands worldwide provide essential hydrological services including water provision, flow regulation, and erosion control. Despite their importance, hydrological research of grasslands in montane regions is usually scarce and disperse, limiting the capacity to improve water resource management. We present a systematic literature review of the hydrological function of high Andean grasslands under conserved, degraded, and restored conditions in ecosystems situated above the tree line in the tropical Andes (páramos, punas, and jalcas). Most hydrological research on these grasslands has been developed in páramos (92%), especially in Ecuador, while research in punas is scarce (6%) despite being the largest grassland extent in the region. For páramos, published literature highlights the importance of conserving grasslands to facilitate water infiltration to soils, which in turn reduces erosive processes. Water-vegetation relations for conserved páramos are well understood, indicating that about 50% of water inputs return to the atmosphere via evapotranspiration, but knowledge about hydrological functions of conserved punas and jalcas is virtually non-existent. Under changing land use, afforestation of grassland ecosystems with exotic tree species, especially pines, reduces soil water storage as well as water yield and flow regulation capacity. Impacts of grazing and agriculture on the hydrological function of páramo grasslands strongly depend on historical land management and current land use practices and are not generalizable. Short-term restoration studies indicate that more than two years are necessary to recover the hydrological function of degraded grasslands, therefore medium and long-term studies are required to determine efficient restoration periods. These knowledge gaps limit the ability to extrapolate and regionalize findings. Future directions aimed to fill them are proposed, and methods successfully used to investigate the hydrology of high Andean grasslands are highlighted. This research not only enlightens what is known about the hydrology of high Andean grasslands, but also seeks to guide future hydrological evaluations to fill identified geographical and topical knowledge gaps precluding improved management of water resources in the tropical Andes.