A century of fire suppression across the Western United States has led to more crowded forests and increased competition for resources. Studies of forest thinning or stand conditions after mortality events have provided indirect evidence for how competition can promote drought stress and predispose forests to severe fire and/or bark beetle outbreaks. Here, we demonstrate linkages between fire deficits and increasing drought stress through analyses of annually resolved tree‐ring growth, fire scars, and carbon isotope discrimination (Δ13C) across a dry mixed‐conifer forest landscape. Fire deficits across the study area have increased the sensitivity of leaf gas exchange to drought stress over the past >100 years. Since 1910, stand basal area in these forests has more than doubled and fire‐return intervals have increased from 25 to 140 years. Meanwhile, the portion of interannual variation in tree‐ring Δ13C explained by the Palmer Drought Severity Index has more than doubled in ca. 300–500‐year‐old Pinus ponderosa as well as in fire‐intolerant, ca. 90–190‐year‐old Abies grandis. Drought stress has increased in stands with a basal area of ≥25 m2/ha in 1910, as indicated by negative temporal Δ13C trends, whereas stands with basal area ≤25 m2/ha in 1910, due to frequent or intense wildfire activity in decades beforehand, were initially buffered from increased drought stress and have benefited more from rising ambient carbon dioxide concentrations, [CO2], as demonstrated by positive temporal Δ13C trends. Furthermore, the average Δ13C response across all P. ponderosa since 1830 indicates that photosynthetic assimilation rates and stomatal conductance have been reduced by ~10% and ~20%, respectively, compared to expected trends due to increasing [CO2]. Although disturbance legacies contribute to local‐scale intensity of drought stress, fire deficits have reduced drought resistance of mixed‐conifer forests and made them more susceptible to challenges by pests and pathogens and other disturbances.