Increasing drought frequency and intensity affect biophysical functions of natural ecosystems. In tropical semi-arid savannas, while immediate drought effects are well-studied, the drought legacy effects on vegetation composition and associated ecosystem functions remain unclear. We used data of vegetation composition, net ecosystem CO2 exchange, surface albedo and evapotranspiration (ET) in 2017-2022 from a savanna ecosystem, Southwest China, to investigate the legacy effect of an extreme drought event that occurred in 2019. Vegetation declined continuously for 3 post-drought years. While tree numbers declined by 12%, shrub numbers dropped by 50% compared with pre-drought levels, shifting vegetation dominance toward trees. This structural change caused sustained reductions in albedo and ET, which remained below pre-drought levels, despite gross primary production recovering in the years immediately post-drought. Vegetation shifts disproportionately impact ecosystem functions, with energy and water fluxes exhibiting greater vulnerability and potentially enhancing regional warming as droughts increase in Asian savannas.