The US Southwest has been entrenched in a two-decade-long megadrought (MD), the most severe since 800 CE, which threatens the long-term vitality and persistence of regional montane forests. Here, we report that in the face of record low winter precipitation and increasing atmospheric aridity, seasonal activity of the North American Monsoon (NAM) climate system brings sufficient precipitation during the height of the summer to alleviate extreme tree water stress. We studied seasonally resolved, tree-ring stable carbon isotope ratios across a 57-year time series (1960-2017) in 17 Ponderosa pine forests distributed across the NAM geographic domain. Our study focused on the isotope dynamics of latewood (LW), which is produced in association with NAM rains. During the MD, populations growing within the core region of the NAM operated at lower intrinsic and higher evaporative water-use efficiencies (WUEi and WUEE , respectively), compared to populations growing in the periphery of the NAM domain, indicating less physiological water stress in those populations with access to NAM moisture. The disparities in water-use efficiencies in periphery populations are due to a higher atmospheric vapor pressure deficit (VPD) and reduced access to summer soil moisture. The buffering advantage of the NAM, however, is weakening. We observed that since the MD, the relationship between WUEi and WUEE in forests within the core NAM domain is shifting toward a drought response similar to forests on the periphery of the NAM. After correcting for past increases in the atmospheric CO2 concentration, we were able to isolate the LW time-series responses to climate alone. This showed that the shift in the relation between WUEi and WUEE was driven by the extreme increases in MD-associated VPD, with little advantageous influence on stomatal conductance from increases in atmospheric CO2 concentration.