Chestnut (Castanea sativa Mill.) forests in the Mediterranean region are facing increasing abandonment due to a combination of factors, ranging from climate change to socioeconomic issues. The recovery of chestnut ecosystems and their preservation and valorization are key to ensuring the supply of the wide spectrum of ecosystem services they provide and to preventing detrimental environmental shifts. The study’s objective was to provide evidence on the effects of different management options on the ecophysiology of chestnut forests, with diverse pruning intensities (low, medium, and high intensity versus no pruning) tested in an abandoned chestnut stand in central Italy with the aim of recovering and rehabilitating it for fruit production. Innovative Internet of Things (IoT) ‘Tree Talker’ devices were installed on single trees to continuously monitor and measure ecophysiological (i.e., water transport, net primary productivity, foliage development) and microclimatic parameters. Results show a reduction in water use in trees subjected to medium- and high-intensity pruning treatments, along with a decrease in the carbon sequestration function. However, interestingly, the results highlight that trees regain their usual sap flow and carbon sink activity at the end of the first post-pruning growing season and fully realign during the following year, as also confirmed by the NDVI values. As such, this paper demonstrates the efficacy of recovering and managing abandoned chestnut forests, and the initial setback in carbon sequestration resulting from pruning is rapidly remedied with the advantage of reviving trees for fruit production. Additionally, the reduced water demand induced by pruning could represent a promising adaptation strategy to climate change, bolstering the resilience of chestnut trees to prolonged and intensified drought periods, which are projected to increase under future climate scenarios, particularly in the Mediterranean region.