Because of global warming, high‐latitude ecosystems are expected to experience increases in temperature and drought events. Wood formation will have to adjust to these new climatic constraints to maintain tree mechanical stability and long‐distance water transport. The aim of this study is to understand the dynamic processes involved in wood formation under warming and drought. Xylogenesis, gas exchange, water relations and wood anatomy of black spruce Picea mariana (Mill.) B.S.P. saplings were monitored during a greenhouse experiment where temperature was increased during daytime or night‐time (+6 °C) combined with a drought period. The kinetics of tracheid development expressed as rate and duration of the xylogenesis sub‐processes were quantified using generalized additive models. Drought and warming had a strong influence on cell production, but little effect on wood anatomy. The increase in cell production rate under warmer temperatures, and especially during the night‐time warming at the end of the growing season, resulted in wider tree‐rings. However, the strong compensation between rates and durations of cell differentiation processes mitigates warming and drought effects on tree‐ring structure. Our results allowed quantification of how wood formation kinetics is regulated when water and heat stress increase, allowing trees to adapt to future environmental conditions. Global warming in high‐latitude ecosystems will affect wood formation. This work focuses on the dynamic processes involved in wood formation under experimental drought and warming treatments. Our study demonstrates that drought and warming have a strong impact on cell production, but a weak influence on xylem anatomy. Using innovative analysis of kinetics of tracheid development, we quantified how the compensation mechanisms between rates and durations of the xylogenesis sub‐processes strongly mitigate negative effects of multistress on wood structure.