In 2019, south-eastern Australia experienced its driest and hottest year on record, resulting in massive canopy dieback events in eucalypt dominated forests. A subsequent period of high precipitation in 2020 provided a rare opportunity to quantify the impacts of extreme drought and consequent recovery. We quantified canopy health and hydraulic impairment (native percent loss of hydraulic conductivity, PLC) of 18 native tree species growing at 15 sites that were heavily impacted by the drought both during and 8-10 months after the drought. Most species exhibited high PLC during drought (PLC:65.1 +/- 3.3%), with no clear patterns across sites or species. Heavily impaired trees (PLC > 70%) showed extensive canopy browning. In the post-drought period, most surviving trees exhibited hydraulic recovery (PLC:26.1 +/- 5.1%), although PLC remained high in some trees (50-70%). Regained hydraulic function (PLC < 50%) corresponded to decreased canopy browning indicating improved tree health. Similar drought (37.1 +/- 4.2%) and post-drought (35.1 +/- 4.4%) percentages of basal area with dead canopy suggested that trees with severely compromised canopies immediately after drought were not able to recover. This dataset provides insights into the impacts of severe natural drought on the health of mature trees, where hydraulic failure is a major contributor in canopy dieback and tree mortality during extreme drought events.