AbstractDuring the 2015–2016 El Niño, the Amazon basin released almost one gigaton of carbon (GtC) into the atmosphere due to extreme temperatures and drought. The link between the drought impact and recovery of the total carbon pools and its biogeochemical drivers is still unknown. With satellite‐constrained net carbon exchange and its component fluxes including gross primary production and fire emissions, we show that the total carbon loss caused by the 2015–2016 El Niño had not recovered by the end of 2018. Forest ecosystems over the Northeastern (NE) Amazon suffered a cumulative total carbon loss of ∼0.6 GtC through December 2018, driven primarily by a suppression of photosynthesis whereas southeastern savannah carbon loss was driven in part by fire. We attribute the slow recovery to the unexpected large carbon loss caused by the severe atmospheric aridity coupled with a water storage deficit during drought. We show the attenuation of carbon uptake is three times higher than expected from the pre‐drought sensitivity to atmospheric aridity and ground water supply. Our study fills an important knowledge gap in our understanding of the unexpectedly enhanced response of carbon fluxes to atmospheric aridity and water storage deficit and its impact on regional post‐drought recovery as a function of the vegetation types and climate perturbations. Our results suggest that the disproportionate impact of water supply and demand could compromise resiliency of the Amazonian carbon balance to future increases in extreme events.