Significance The state of California has a globally important economy and a population exceeding 38 million. The state relies on its forested watersheds to support numerous services, such as water provisioning, carbon storage, timber products, ecotourism, and recreation. However, secular changes in air temperature, combined with periodic and prolonged drought, pose a compounding challenge to forest health. Here we use new remote-sensing and modeling techniques to assess changes in the canopy water content of California’s forests from 2011 to 2015. Our resulting maps of progressive canopy water stress identify at-risk forest landscapes and watersheds at fine resolution, and offer geographically explicit information to support innovative forest management and policies in preparation for climate change.