The effects of the changing frequency and severity of drought events in Central Europe may become a growing concern for its forests. In this study, we looked into how Hungary’s forests have been affected by the 2022 compound heatwave and drought, following an arid period from 2018 to 2021. We used our active intensive monitoring plots of the Forest Protection Measuring and Monitoring System (Level II in the ICP Forests) across the country between 2017 and 2022. We analyzed satellite images to support a survey of the large-scale drought utilizing moderate and high-resolution data. The health state of the forest calculated and mapped on the NDVI, ZNDVI, and NDWI indices showed damage and regeneration throughout the period studied. Overall, the forest stands observed tolerated the negative impacts of the drought (126–204 mm water deficit in 2022) based on our biomass data (the summer leaf loss was 14% in each monitoring plot). However, the classified Z-NDVI values of the Sentinel-2 satellite imagery for the period 2017–2022 showed a severe drought in 2022, which was followed by some improvement in 2023.