The Caatinga is a botanically unique semi-arid ecosystem in northeast Brazil whose vegetation is adapted to the periodic droughts that characterize this region. However, recent extreme droughts events caused by anthropogenic climate change have challenged its ecological resilience. Here, we evaluate how deforestation and protection status affect the response of the Caatinga vegetation to drought. Specifically, we compared vegetation responses to drought in natural and deforested areas as well as inside and outside protected areas, using a time-series of satellite-derived Normalized Difference Vegetation Index (NDVI) and climatic data for 2008–2013. We observed a strong effect of deforestation and land protection on overall vegetation productivity and in productivity dynamics in response to precipitation. Overall, deforested areas had significantly lower NDVI and delayed greening in response to precipitation. By contrast, strictly protected areas had higher productivity and considerable resilience to low levels of precipitation, when compared to sustainable use or unprotected areas. These results highlight the importance of protected areas in protecting ecosystem processes and native vegetation in the Caatinga against the negative effects of climate change and deforestation. Given the extremely small area of the Caatinga currently under strict protection, the creation of new conservation areas must be a priority to ensure the sustainability of ecological processes and to avoid further desertification.