Predicted changes in climate have raised concerns about potential impacts on terrestrial forest ecosystem productivity, biogeochemical cycling, and the availability of water resources. This review summarizes characteristics of drought typical to the major forest regions of the United States, future drought projections, and important features of plant and forest community response to drought. Research needs and strategies for coping with future drought are also discussed. Notwithstanding uncertainties surrounding the magnitude and direction of future climate change, and the net impact on soil water availability to forests, a number of conclusions can be made regarding the sensitivity of forests to future drought. The primary response will be a reduction in net primary production and stand water use, which are driven by reductions in stomatal conductance. Mortality of small stature plants (i.e. seedlings and saplings) is a likely consequence of severe drought. In comparison, deep rooting and substantial reserves of carbohydrates and nutrients make mature trees less susceptible to water limitations caused by severe or prolonged drought. However, severe or prolonged drought may render even mature trees more susceptible to insects or disease. Drought-induced reductions in decomposition rates may cause a buildup of organic material on the forest floor, with ramifications for fire regimes and nutrient cycling. Although early model predictions of climate change impacts suggested extensive forest dieback and species migration, more recent analyses suggest that catastrophic dieback will be a local phenomenon, and changes in forest composition will be a relatively gradual process. Better climate predictions at regional scales, with a higher temporal resolution (months to days), coupled with carefully designed, field-based experiments that incorporate multiple driving variables (e.g. temperature and CO2), will advance our ability to predict the response of different forest regions to climate change.