Severe soil and water loss has led to wide spread land degradation in Pakistan’s hilly areas. During the past years, efforts were made on vegetation restoration to reduce soil and water loss. However, due to water shortage the efficiency of vegetation restoration was not as satisfactory as expected. So a research study was conducted aiming to understand the relationship between vegetation cover and soil & water conservation. The goal of the study was to find appropriate vegetation cover that would be most effective in controlling runoff and soil erosion in Murree hills. Study was conducted in different natural vegetation plots with five vegetation covers i-e trees without understory vegetation (VT1), trees with natural understory (VT2), Mixed vegetation cover (VT3), trees with shrubs (VT4) and Grasses only (VT5). Soil water content, runoff and sediment yield were measured after each rainfall event. The results showed that least runoff and sediment loss was recorded under VT3. Whereas the mean maximum soil moisture was observed under VT5 compared to other vegetation types.