The drought of summer 2018, which affected much of Northern Europe, resulted in low river flows, biodiversity loss and threats to water supplies. In some regions, like the Scottish Highlands, the summer drought followed two consecutive, anomalously dry, winter periods. Here, we examine how the drought, and its antecedent conditions, affected soil moisture, groundwater storage, and low flows in the Bruntland Burn; a sub‐catchment of the Girnock Burn long‐term observatory in the Scottish Cairngorm Mountains. Fifty years of rainfall‐runoff observations and long‐term modelling studies in the Girnock provided unique contextualisation of this extreme event in relation to more usual summer storage dynamics. Whilst summer precipitation in 2018 was only 63% of the long‐term mean, soil moisture storage across much of the catchment were less than half of their summer average and seasonal groundwater levels were 0.5 m lower than normal. Hydrometric and isotopic observations showed that ~100 mm of river flows during the summer (May‐Sept) were sustained almost entirely by groundwater drainage, representing ~30% of evapotranspiration that occurred over the same period. A key reason that the summer drought was so severe was because the preceding two winters were also dry and failed to adequately replenish catchment soil moisture and groundwater stores. As a result, the drought had the biggest catchment storage deficits for over a decade, and likely since 1975–1976. Despite this, recovery was rapid in autumn/winter 2018, with soil and groundwater stores returning to normal winter values, along with stream flows. The study emphasizes how long‐term data from experimental sites are key to understanding the non‐linear flux‐storage interactions in catchments and the “memory effects” that govern the evolution of, and recovery from, droughts. This is invaluable both in terms of (a) giving insights into hydrological behaviours that will become more common water resource management problems in the future under climate change and (b) providing extreme data to challenge hydrological models.