Dwarf forest, elfin forest, or pygmy forest is an uncommon ecosystem featuring miniature trees, inhabited by small species of fauna such as rodents and lizards. They are usually located at high elevations, under conditions of sufficient air humidity but poor soil. There are two main dwarf forest ecosystem types, involving different species and environmental characteristics: coastal temperate and montane tropical regions. Temperate coastal dwarf forest is common for parts of Southern California. Montane tropical forests are found across tropical highlands of Central America, northern South America and Southeast Asia. There are also other isolated examples of dwarf forests scattered across the world, while the largest dwarf forest is found in the Philippines.

High-elevation tropical locations in cloud forests contain mossy wet elfin forests due to high-elevation precipitation. These regions are characterized by low rainfall, with most of the water in the form of mist and fog. The water supplied is primarily available during the night, when clouds move from the ocean over the mountains, and are intercepted by the vegetation. During the day, water demands are increased as clouds rise over the mountain peaks without dissipating into available forms of precipitation.

The forests are characterized by small trees (5–8 m), with shallow root systems, and abundant epiphytes. The epiphytes make up a large portion of the canopy, with greater abundances in high-elevation tropical elfin forests than what is found in other, non-elfin, tropical forests.

Dwarf forests should be more commonly found on isolated mountains due to the massenerhebung effect. The massenerhebung effect is a phenomenon where treelines are typically higher among mountains in close proximity to other mountains. The mountains in close proximity affect the rate of wind and heat retention, decreasing the negative effects of climate. When the treeline is lower on isolated mountains, the climatic effects are more severe.

Within montane dwarf forests, there are relatively few species, with a small number of dominant species that make up a large portion of the population. Low, horizontally-branching, shrub-like plants, and dense populations of moss, lichen, and liverworts are found due to high wind speeds, low temperatures and light reduction from persistent clouds and fog, which limit the growth of tall plants. The high wind speeds act as the determining factor of the stature in dwarf forest flora, especially on ridges and slopes. A low stature increases the structural stability of the plants. Wind-exposed trees invest more of their resources to increasing strength than to growth, compared to non-wind-exposed trees. The increased focus on strengthening leads to thicker trunks and twigs, which increases the ability of the trees to withstand greater wind stresses near the ridge-crest, where the majority of wind-exposed trees are found. A large percentage of energy is also allocated to growing and maintaining heavy and extensive root structures, further strengthening the tree and increasing its resistance to high winds.

Plants here have leaves with moisture-tolerant characteristics, such as drip tips and waxy cuticles. They also have a slow rate of transpiration and metabolism due to low temperatures and low radiation penetration. A large percentage of plants possess alkaloids and other natural products, likely to combat a high amount of herbivory from insects. This may also account for the low leaf surface area and low transpiration rates of the plants. One study showed that leaves of ten plant species had approximately 70–98% of all leaves damaged by insects.

Elfin forests occur at high elevations, which are generally associated with low vertebrate biodiversity. Hummingbirds and bats make up a large proportion of the vertebrates in some areas, usually as altitudinal migrants during seasonal shifts, such as for reproduction, or in response to food abundance. Other vertebrate species mostly include small rodents.

Rainfall tends to be highly seasonal, sparse, and far between, therefore fog interception is a significant water source during dry seasons. Throughout the year, wind speed, temperature and humidity are fairly consistent, with humidity usually greater than 90%. At one study site in the Guajira Peninsula, dry season precipitation ranged from 1–4 days per month, while in the wet season, although increased, it was still a relatively low 4 to 12 days per month, supporting the idea that the majority of the water in this region is held in low cloud cover and fog interception. Sunshine duration is distributed bimodally and correlates with evaporation rates.