Many studies have demonstrated the efficacy of protected areas for conserving biodiversity; however, few have investigated the drivers and environmental outcomes of losses in site protection. These events, termed protected area downgrading, downsizing, and degazettement (PADDD), have been documented in various contexts in recent years, one of the most prevalent being Cambodia. We conducted a review of Cambodia’s recent sociopolitical history and assessed deforestation patterns related to PADDD events to determine the drivers and environmental outcomes of PADDD in this context. The drivers of these PADDD events can be traced to large-scale land concessions granted across Cambodia between 1998 and 2012. Policies heavily promoted private investment in agro-industrial activities by way of economic land concessions, some of which were located in protected sites, resulting in PADDD across 12.5% of Cambodia’s protected lands. In total, these legal changes led to 18 downgrades and, eventually, two degazettements. Results show that levels of deforestation and forest fragmentation are significantly higher in these downgraded sites compared to those which remained fully protected. Furthermore, heightened levels of deforestation are apparent up to 7 km outside of economic land concessions on average. The conservation impact of PADDD in this context is likely high, as we document that 20 species of threatened amphibians, birds, and mammals have at least 5% of their global habitat range within or near a downgraded site. This study highlights one potential pathway and outcome of PADDD and may be seen as a guide to preemptively identifying potentially harmful outcomes in similar contexts.