Extreme drought has negative impacts on the health of vegetation and the stability of ecosystems. In this study, the CASA model was employed to estimate the net primary productivity of vegetation over the Yunnan Plateau. The time-lag effects on vegetation were observed within a 0–6 month period of extreme droughts using the Pearson correlation coefficient. The resistance of vegetation during extreme droughts was quantified, and the recovery capability of vegetation following these events was analyzed using the ARIMA model. Moreover, the study investigated the response of vegetation to extreme droughts across diverse altitudinal gradients. The results showed that: (1) This round of extreme drought led to a decrease in the NPP of vegetation in the Yunnan Plateau. (2) Vegetation exhibits a 1–3-month lag period in response to extreme drought, with forests showing slower responses than grasslands and shrubs and higher resistance to the drought. Except for agricultural vegetation, most other vegetation types are able to recover their productivity within a year. (3) Vegetation above 3000 m is less susceptible to the impacts of extreme drought. With increasing elevation, forests exhibit an earlier lag period in response to extreme drought and an increase in resistance, but lower elevation vegetation demonstrates better recovery from extreme drought events. Shrub vegetation shows the highest resistance at elevations between 3000–4000 m, and shrubs at middle to high elevations have better recovery capacity than those at low elevations. Grassland vegetation exhibits increased resistance to extreme drought with higher elevation and shows better recovery. Agricultural vegetation demonstrates higher resistance at middle to high elevations, with no significant elevation differences in recovery capacity. Extreme drought events not only have a lag effect on the vegetation ecosystem, but also affect its stability and resilience to future drought events. To adapt to climate change, future research should emphasize the role of small-scale climate in vegetation’s response to drought.