Droughts negatively affect tree vitality, growth and mortality in temperate forests. Appropriate forest management may help mitigate these adverse effects. One such silvicultural system is coppicing, which increases a stand’s drought resistance compared to high forests, but the underlying mechanisms are not well explored. Here, we aimed to deepen our mechanistic understanding of the performance of sessile oak (Quercus petraea) in response to drought stress. We compared mature trees, young coppice and seedlings. We measured seasonal variation of tree water status, photosynthesis, and biometric traits of sessile oak over three growing seasons. Coppicing increased water use and photosynthesis both under drought stress conditions and favorable conditions. During mild to severe drought, coppiced trees had better access to water and assimilated more carbon per unit of leaf area than seedlings and mature trees. The lowest predawn water potential of -4.21 MPa was recorded in seedlings, which was by 0.8 MPa less than in the coppice. Photosynthesis rates were highest in the coppice, but the water use efficiency of the coppice fell in between mature trees (higher WUEi) and seedlings (lower WUEi). Combined measurements of chlorophyll fluorescence and gas exchange suggested that coppice, seedlings and mature trees responded differently to drought. Coppice had the highest yield in light reactions of photosynthesis and the highest carbon assimilation. Coppicing improves the physiological vitality of young sprousts which makes it a suitable silvicultural system for dry sites.