Widespread lake drainage can lead to large-scale drying in Arctic lake-rich areas, affecting hydrology, ecosystems and permafrost carbon dynamics. To date, the spatio-temporal distribution, driving factors, and post-drainage dynamics of lake drainage events across the Arctic remain unclear. Using satellite remote sensing and surface water products, we identify over 35,000 (~0.6% of all lakes) lake drainage events in the northern permafrost zone between 1984 and 2020, with approximately half being relatively understudied non-thermokarst lakes. Smaller, thermokarst, and discontinuous permafrost area lakes are more susceptible to drainage compared to their larger, non-thermokarst, and continuous permafrost area counterparts. Over time, discontinuous permafrost areas contribute more drained lakes annually than continuous permafrost areas. Following drainage, vegetation rapidly colonizes drained lake basins, with thermokarst drained lake basins showing significantly higher vegetation growth rates and greenness levels than their non-thermokarst counterparts. Under warming, drained lake basins are likely to become more prevalent and serve as greening hotspots, playing an important role in shaping Arctic ecosystems.