Drought is a devastating natural event that affects crop yield and upsets the terrestrial carbon cycle balance. Agricultural drought affects water use efficiency (WUE) through changes in gross primary productivity (GPP) and evapotranspiration (ET). However, there is limited study that investigate drought induced WUE and drought recovery period in heterogeneous climate regions. The purpose of this study was twofold, i.e. to quantify the influence of agricultural drought on WUE and to estimate drought recovery period in different climate regions of Iran. Climate zoning was performed for Iran based on the De Martonne classification method, and agricultural drought was monitored using standard vegetation index during 2000–2020. Years 2000, 2001, and 2008 were identified as drought years. The remote sensing indices of GPP and ET showed that WUE increased during the drought years in all climates and more significantly in arid zones than in humid ones. Arid regions were also more resistant and humid regions were more resilient to drought. In all climates except the very humid zone, WUE anomalies upsurged with increased drought severity. The recovery period was faster in humid climates than in arid regions, and longer recovery periods were observed in areas where severe drought occurred. The results of this study are crucial to gaining insights into water and carbon cycles. We showed that considering climate regions in drought assessment can efficiently reveal the role of environmental heterogeneity which is essential for the efficient management of drought at large-scale studies.