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Forest vegetation and soils have been suggested as potentially important sinks for carbon (C) with appropriate management and thus are implicated as effective tools in stabilizing climate even with increasing anthropogenic release of CO2. Drought, however, which is often predicted to increase in models of future climate change, may limit net primary productio (NPP) of dry forest types, with unknown effects on soil C storage. We studied C dynamics of a deciduous temperate forest of Hungary that has been subject to significant decreases in precipitation and increases in temperature in recent decades. We resampled plots that were established in 1972 and repeated the full C inventory by analyzing more than 4 decades of data on the number of living trees, biomass of trees and shrubs, and soil C content. Our analyses show that the decline in number and biomass of oaks started around the end of the 1970s with a 71% reduction in the number of sessile oak stems by 2014. Projected growth in this forest, based on the yield table's data for Hungary, was 4.6 kg C/m2. Although new species emerged, this new growth and small increases in oak biomass resulted in only 1.9 kg C/m2 increase over 41 years. The death of oaks increased inputs of coarse woody debris to the surface of the soil, much of which is still identifiable, and caused an increase of 15.5%, or 2.6 kg C/m2, in the top 1 m of soil. Stability of this fresh organic matter input to surface soil is unknown, but is likely to be low based on the results of a colocated woody litter decomposition study. The effects of a warmer and drier climate on the C balance of forests in this region will be felt for decades to come as woody litter inputs decay, and forest growth remains impeded.The distribution of dry, extreme dry, and wet years from 1953 to 2014 (Bases: 1950–1980 average precipitation). The shaded area represents the time frame of the oak decline. Dry conditions in forest, forest stand composition and diversity change, net primary production, and oak decline.