European forests are among the most extensively studied ecosystems in the world, yet there are still debates about their recent dynamics. We modeled the changes in tree canopy height across Europe from 2001 to 2021 using the multidecadal spectral data from the Landsat archive and calibration data from Airborne Laser Scanning (ALS) and spaceborne Global Ecosystem Dynamics Investigation (GEDI) lidars. Annual tree canopy height was modeled using regression tree ensembles and integrated with annual tree canopy removal maps to produce harmonized tree height map time series. From these time series, we derived annual tree canopy extent maps using a ≥ 5 m tree height threshold. The root-mean-square error (RMSE) for both ALS-calibrated and GEDI-calibrated tree canopy height maps was ≤4 m. The user's and producer's accuracies estimated using reference sample data are ≥94% for the tree canopy extent maps and ≥ 80% for the annual tree canopy removal maps. Analyzing the map time series, we found that the European tree canopy extent area increased by nearly 1% overall during the past two decades, with the largest increase observed in Eastern Europe, Southern Europe, and the British Isles. However, after the year 2016, the tree canopy extent in Europe declined. Some regions reduced their tree canopy extent between 2001 and 2021, with the highest reduction observed in Fennoscandia (3.5% net decrease). The continental extent of tall tree canopy forests (≥ 15 m height) decreased by 3% from 2001 to 2021. The recent decline in tree canopy extent agrees with the FAO statistics on timber harvesting intensification and with the increasing extent and severity of natural disturbances. The observed decreasing tree canopy height indicates a reduction in forest carbon storage capacity in Europe.