The ecosystem services provided by mangroves are often ignored in the ongoing process of mangrove conversion. Services provided by the Bhitarkanika mangrove ecosystem in India and estimated cyclone damage avoided in three selected villages, taking the cyclone of 1999 as a reference point, were valued by assessing the socio-economic status of the villages, the cyclone damage to houses, livestock, fisheries, trees and other assets owned by the people, and the level and duration of flooding. Eleven variables were used to compare damage in the villages, one protected by mangroves, one unprotected by mangroves, and the third possessing an embankment on its seaward side. Attitude surveys were carried out in 10% of the households in 35 villages located in the Bhitarkanika Conservation Area to assess local people's perceptions regarding the storm protection function of mangroves and their attitude towards mangrove forests generally. In the mangrove-protected village, variables had either the lowest values for adverse factors (such as damage to houses), or the highest values for positive factors (such as crop yield). The loss incurred per household was greatest (US$ 33.31). The local people were aware of and appreciated the functions performed by the mangrove forests in protecting their lives and property from cyclones, and were willing to cooperate with the forest department in mangrove restoration.