How are the survival and growth of trees under severe drought affected by their size? While some studies have shown that large trees are more vulnerable to drought than smaller trees, others found that small trees are the more vulnerable. We explored the potential relationships between canopy height and forest responses to drought indicated by tree mortality, tree ring width index (RWI), and normalized difference vegetation index (NDVI) in the southwestern United States (SWUS) in 2002. In that year many trees had zero tree ring growth due to mortality and dieback, presumably related to drought-stress. With RWI data from a tree ring data base and climate data co-located with the field measurements, we found size-dependent linear correlations between these forest responses and canopy height in SWUS under severe drought condition. During that drought period, both trunk growth (RWI) and leaf growth (NDVI) were positively correlated with canopy height of the smaller trees (less than 18 m) and negatively correlated with canopy height of greater than 18 m. Tree mortality was negatively correlated with canopy height up to 15 m. Both local-scale and regional-scale data are consistent in showing that forests with medium canopy height (around 18 meters) showed the greatest resistance to severe drought. We suggest that negative impacts of severe drought on forests could be modified with active management of canopy structure.