The dynamics of blue and green water partitioning under vegetation and climate change, as well as their different interactions during wet and dry periods, are poorly understood in the literature. We analyzed the impact of vegetation changes on blue water generation in a central Spanish Pyrenees basin undergoing intense afforestation. We found that vegetation change is a key driver of large decreases in blue water availability. The effect of vegetation increase is amplified during dry years, and mainly during the dry season, with streamflow reductions of more than 50%. This pattern can be attributed primarily to increased plant water consumption. Our findings highlight the importance of vegetation changes in reinforcing the decrease in water resource availability. With aridity expected to rise in southern Europe over the next few decades, interactions between climate and land management practices appear to be amplifying future hydrological drought risk in the region. Plain Language Summary Forest recovery, due to human land abandonment, has been observed in several regions worldwide. To improve integrated land and water management, it is crucial to explore how these changes affect resource availability in water‐stressed areas. Forest regeneration has resulted in a large decrease in streamflow in a natural catchment in southwestern Europe, which cannot be explained by climate change. During the dry season, forest regeneration amplifies the impact of drought and water availability, with less impacts in the wet season. Therefore, the effects of vegetation recovery on water resources differ based on water availability, with the most serious implications for water resources occurring during dry periods. Key Points Forest secondary succession is the main driver of streamflow trends in mountain Mediterranean areas The effects of vegetation changes on water availability strongly differ between dry and humid periods Trends in streamflow in response to vegetation changes are mostly recorded during the dry and warm season