The summer drought of 2018 was one of the most climatically severe events in Europe that led to record-breaking temperatures and wildfires in many parts of Europe. The main objective of this study was to assess the impact of the 2018 drought on the phenotypic and genetic response of Norway spruce height growth using the Standardized Precipitation-Evapotranspiration Index (SPEI). To achieve this, the total cumulative height growth of about 6000 clones from 2016 to 2019 in four full-sib trials in Sweden, aged 6–7 years, and from 2017 to 2019 in two half-sib trials in Finland, aged 8–9 years, were measured. The results indicate that the 2018 drought caused reductions in the increment of trees. Although heritability estimates were similar to other reports for Norway spruce, the additive genetic variance was highly inflated in one of the visibly drought-damaged trials in Southern Sweden. Similarly, the genotype by environment (G × E) interaction was highly significant in the drought-damaged Southern Swedish trials. Both additive genetic and phenotypic correlations obtained between height increments in 2019 and final heights were the weakest in all studied trials, implying that the drought legacies might have influenced the recovery of trees in 2019. We may conclude that the severe drought can be an underlying factor for a strong G × E interaction and changes in the ranking of genotypes. Therefore, a selection of drought-resistant genotypes with a good growth capacity tested in variables sites should be considered as an important criterion for future breeding of Norway spruce.