Drought frequency and severity are increasing under climate change, posing growing risks to temperate forests historically adapted to humid conditions. Concurrently, forest composition is shifting, with declining regeneration of sugar maple (Acer saccharum) and increased proliferation of American beech (Fagus grandifolia) in the understory. This work aimed to (i) improve understanding of sugar maple forest responses to drought while accounting for ongoing composition shifts and (ii) assess how drought conditions are projected to evolve under climate change. Forest drought response was studied using a throughfall-exclusion experiment to simulate summer soil water deficits in plots with either dense beech sapling understories or sugar maple-dominated understories. Tree species had contrasting transpiration responses to water limitation, reflected by differences in leaf water potential between beech and sugar maple saplings. Soil water deficit increased fine root biomass in surface soils and reduced litter decomposition. Sap collected from sugar maple trees in the spring had lower sugar concentrations in throughfall-exclusion plots. Overall, results have shown the cascading impacts of drought on forest functioning, including tree-water relations. Future drought dynamics were assessed by comparing climate change projection of four standardized drought indices incorporating different hydrological processes: total precipitation (SPI), evapotranspiration (SPEI), snowmelt (SMRI) and all processes combined (SWBI). Drought projections varied strongly with processes considered: snowmelt-based indices indicated drier springs and evapotranspiration-based indices intensified summer drying. These findings show that drought projection in humid, snow-influenced regions cannot be assessed from precipitation alone, highlighting the need for process-based assessments to predict temperate forest responses under climate change.