AbstractForest canopy height is an important indicator of forest biomass, species diversity, and other ecosystem functions; however, the climatic determinants that underlie its global patterns have not been fully explored. Using satellite LiDAR‐derived forest canopy heights and field measurements of the world's giant trees, combined with climate indices, we evaluated the global patterns and determinants of forest canopy height. The mean canopy height was highest in tropical regions, but tall forests (>50 m) occur at various latitudes. Water availability, quantified by the difference between annual precipitation and annual potential evapotranspiration (P−PET), was the best predictor of global forest canopy height, which supports the hydraulic limitation hypothesis. However, in striking contrast with previous studies, the canopy height exhibited a hump‐shaped curve along a gradient of P−PET: it initially increased, then peaked at approximately 680 mm of P−PET, and finally declined, which suggests that excessive water supply negatively affects the canopy height. This trend held true across continents and forest types, and it was also validated using forest inventory data from China and the United States. Our findings provide new insights into the climatic controls of the world's giant trees and have important implications for forest management and improvement of forest growth models.