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• R. pseudoacacia is more water use efficient than T. cordata. • This is particularly true under drought conditions. • R. pseudoacacia limits its microclimatic cooling effect more than T. cordata. • T. cordata is more prone to growth limitations due to drought conditions. Urban trees are supposed to have an important regulating function for the urban microclimate, carbon sequestration and a number of other ecosystem services. Vice versa, urban trees suffer from droughts that are typically enhanced within the urban heat island. In the present study, we examined how ecosystem services cooling and carbon sequestration by urban trees were impaired due to the extreme Central European drought periods in the years 2018 and 2019. The analysis was based on continuous measurements of tree growth, sap flow and meteorological characteristics along a transect of five sites of Tilia cordata and three sites of Robinia pseudoacacia spread over the urban area of Würzburg, Germany. The biomass increment of both tree species was reduced up to 50 % with respect to normal weather conditions, especially in the extreme drought year 2018. The studied tree species revealed contrasting growth strategies with T. cordata being more prone to droughts than R. pseudoacacia. Under drought conditions R. pseudoacacia showed twice as much carbon sequestration as T. cordata , which means that R. pseudoacacia is much more water use efficient than T. cordata. In drought years the water use efficiency increases up to 4.4 kg (kg H 2 O)−1 for R. pseudoacacia , while it remains at 0.83–0.86 kg (kg H 2 O)−1 for T. cordata. Whereas both species have shown substantially reduced transpiration rates in both years, T. cordata had a higher transpiration activity than R. pseudoacacia , Hence, T. cordata made a larger contribution to microclimatic cooling in drought and normal years. These findings are systematically depending on the specific sites within the urban area. [Display omitted] [ABSTRACT FROM AUTHOR]