Tree crown defoliation is the most widespread indicator of forest health and vitality in Europe. It is part of the ICP Forests Pan-European survey and it is adopted for reporting under Forest Europe. It is readily understandable and can count on fairly harmonized, long-term, large-scale data series across Europe. On the other hand, it is unspecific with respect to possible causes of damage, and its relation with tree functioning remains unclear. This study focused on European beech (Fagus sylvatica L.), Turkey oak (Quercus cerris L.), and holm oak (Quercus ilex L.), three important broadleaved forest species in southern Europe. We investigated whether and to what extent morpho-physiological (functional) leaf traits and other indicators of foliar, branch and stem health condition are associated with tree defoliation. We tested the relationship between defoliation and leaf-, branch- and stem attributes, and whether indicators of damage and functional leaf traits significantly differ (Mann-Whitney U Test) between defoliated (defoliation > 25%) and undefoliated trees (defoliation ≤ 25%). For each species, we considered one site (three to five plots each) and n = 11–19 randomly selected trees. For each tree, the following indicators were measured: crown condition (defoliation; leaf-, branch- and stem damage, in terms of extent and intensity of damage), leaf morphology (leaf thickness, leaf area, lamina length, fluctuating asymmetry, specific leaf area, damaged leaf surface), leaf physiology and chemistry (chlorophyll a fluorescence, chlorophyll content, carbon and nitrogen stable isotopes composition δ13C, δ15N, carbon/nitrogen ratio). Results show that, for the selected trees of all the three species, defoliation was positively related to the extent of damage on branches. While increasing defoliation in European beech was also accompanied by several significant differences at leaf level (i.e., leaf damage, leaf volume, dry weight, carbon/nitrogen ratio and photosynthetic efficiency), for Turkey oak and holm oak the significant differences between defoliated and undefoliated trees were limited to damage on branches (both species).