Central and semiarid north-eastern Asia was subject to twentieth century warming far above the global average. Since forests of this region occur at their drought limit, they are particularly vulnerable to climate change. We studied the regional variations of temperature and precipitation trends and their effects on tree growth and forest regeneration in Mongolia. Tree-ring series from more than 2,300 trees of Siberian larch (Larix sibirica) collected in four regions of Mongolia's forest zone were analyzed and related to available weather data. Climate trends underlie a remarkable regional variation leading to contrasting responses of tree growth in taiga forests even within the same mountain system. Within a distance of a few hundred kilometers (140-490 km), areas with recently reduced growth and regeneration of larch alternated with regions where these parameters remained constant or even increased. Reduced productivity could be correlated with increasing summer temperatures and decreasing precipitation; improved growth conditions were found at increasing precipitation, but constant summer temperatures. An effect of increasing winter temperatures on tree-ring width or forest regeneration was not detectable. Since declines of productivity and regeneration are more widespread in the Mongolian taiga than the opposite trend, a net loss of forests is likely to occur in the future, as strong increases in temperature and regionally differing changes in precipitation are predicted for the twenty-first century.