Climate change is progressively increasing severe drought events in the Northern Hemisphere, causing regional tree die-off events and contributing to the global reduction of the carbon sink efficiency of forests. There is a critical lack of integrated community-wide assessments of drought-induced responses in forests at the macroecological scale, including defoliation, mortality, and food web responses. Here we report a generalized increase in crown defoliation in southern European forests occurring during 1987–2007. Forest tree species have consistently and significantly altered their crown leaf structures, with increased percentages of defoliation in the drier parts of their distributions in response to increased water deficit. We assessed the demographic responses of trees associated with increased defoliation in southern European forests, specifically in the Iberian Peninsula region. We found that defoliation trends are paralleled by significant increases in tree mortality rates in drier areas that are related to tree density and temperature effects. Furthermore, we show that severe drought impacts are associated with sudden changes in insect and fungal defoliation dynamics, creating long-term disruptive effects of drought on food webs. Our results reveal a complex geographical mosaic of species-specific responses to climate change–driven drought pressures on the Iberian Peninsula, with an overwhelmingly predominant trend toward increased drought damage.