Vegetation plays a critical role in the hydrological cycle by facilitating water exchange between the soil and the atmosphere through transpiration. Understanding how plants regulate water flux across different scales is vital for predicting forest responses to drought and managing forests for their hydrological benefits in the face of climate change. Increasing drought frequency and intensity threaten these services, disrupting plant physiology and increasing tree mortality. Thus, there is a global imperative to comprehend the dynamics driving down-regulation of forest transpiration and stomatal sensitivity. Our research aims to untangle the impacts of precipitation reduction, vapor pressure deficit (VPD), and soil moisture stress on tree water and carbon dynamics, focusing on diverse forest ecosystems' responses to severe drought. Through throughfall exclusion experiments in temperate mixed pine-oak and montane tropical cloud forests, we investigated these ecosystems' sensitivity to changes in soil moisture and VPD. Using ecophysiological techniques such as sap flow measurements and point dendrometers, we examined how plants regulate water fluxes in response to moisture stress over time. Our findings demonstrate how soil moisture and VPD thresholds drive reductions in forest transpiration, with variations across ecosystems. We highlight the complexity of forest responses to drought, revealing different controls exerted by tree species in each ecosystem. Furthermore, our results underscore the influence of regional and forest-type-specific factors on vegetation water use dynamics, providing insights for enhancing ecosystem resilience to drought under changing climates.