Increasing drought stress under climate change exerting large impacts on vegetation has aroused growing concern, yet how vegetation greenness and carbon cycle respond to extreme drought is not well understood. In this paper, we studied this issue with various data sources including satellite observation, flux sites upscaling estimation, atmospheric inversion, and Dynamic Global Vegetation Model (DGVM) simulations over China during the period 2000–2015. We found a highly consistent negative response of greenness and carbon fluxes to extreme droughts, with the largest reduction in Gross Primary Productivity (GPP, a standardized anomaly of -1.26 ~ -0.33), a slightly smaller extent decrease of Net Ecosystem Productivity (NEP, -0.74 ~ -0.14) due to concurrent decrease of respiration, and reduced Leaf Area Index (LAI, -0.39 ~ -0.20). Besides, there was a large spatial heterogeneity across different regions and biomes, where Loess Plateau was one of the most vulnerable regions. The ambient climate conditions were found to modulate the drought response. Drought sensitivity of greenness and GPP peaked where mean annual temperature is around 25 °C, while that of NEP decreased along increasing precipitation gradients.