Abstract Understanding the impacts of extreme drought on forest productivity requires a comprehensive assessment of tree and forest resilience. However, current approaches to quantifying resilience limit our understanding of forest response dynamics, recovery trajectories and drought legacies by constraining the temporal scale and resolution of assessment. We compared individual tree growth histories with growth forecasted using dynamic regression at an annual resolution, allowing drought impact and individual tree and stand level recovery dynamics to be assessed relative to a scenario where no drought occurred. The novel application of this approach allowed us to quantify the cumulative impact of drought legacy on radial growth at multiple stem heights at different stand densities. We show that the choice of pre‐ and post‐drought periods over which resilience is assessed can lead to systematic bias in both estimates and interpretations of resilience indices. In contrast, measuring growth resilience annually revealed clear nonlinearities in tree and stand recovery trajectories. Furthermore, we demonstrate that the influence of pre‐drought attributes such as tree size, growth rates and stand densities on growth resilience were only detectable at certain stages of recovery. Importantly, we show that the legacy of drought on tree growth can become positive for some individuals, extending up to 9 years after the event such that post‐recovery growth can result in the reclamation of some lost tree and stand basal area. Synthesis. We demonstrate the importance of increasing the temporal scale and resolution of forest resilience assessment in order to understand both patterns and drivers of drought recovery. We highlight the shortcomings of collapsing growth response into a single average value and show how drought legacy can persist into a post‐recovery phase, even positively impacting the growth of some trees. If unaccounted for, this post‐recovery growth phase can lead to an underestimation of resilience and an overestimation of above‐ground losses in productivity, highlighting the importance of considering longer‐term drought legacies and compensatory growth on basal area.