The 2012-2015 drought has left California with severely reduced snowpack, soil moisture, ground water, and reservoir stocks, but the impact of this estimated millennial-scale event on forest health is unknown. We used airborne laser-guided spectroscopy and satellite-based models to assess losses in canopy water content of California's forests between 2011 and 2015. Approximately 10.6 million ha of forest containing up to 888 million large trees experienced measurable loss in canopy water content during this drought period. Severe canopy water losses of greater than 30% occurred over 1 million ha, affecting up to 58 million large trees. Our measurements exclude forests affected by fire between 2011 and 2015. If drought conditions continue or reoccur, even with temporary reprieves such as El Niño, we predict substantial future forest change.