Increasing heatwave and drought events can potentially alter the carbon cycle. Few studies have investigated the impacts of hundred-year return heatwaves and droughts, as those events are rare. In the summer of 2013, southern China experienced its strongest drought and heatwave on record for the past 113 years. We show that the record-breaking heatwave and drought lasted two months (from July to August), significantly reduced the satellite-based vegetation index and gross primary production, substantially altered the regional carbon cycle, and produced the largest negative crop yield anomaly since 1960. The event resulted in a net reduction of 101.54 Tg C in carbon sequestration in the region during these two months, which was 39-53% of the annual net carbon sink of China's terrestrial ecosystems (190-260 Tg C yr(-1)). Moreover, model experiments showed that heatwaves and droughts consistently decreased ecosystem vegetation primary production but had opposite impacts on ecosystem respiration (TER), with increased TER by 6.78 ± 2.15% and decreased TER by 15.34 ± 3.57% assuming only changed temperature and precipitation, respectively. In light of increasing frequency and severity of future heatwaves and droughts, our study highlights the importance of accounting for the impacts of heatwaves and droughts in assessing the carbon sequestration in terrestrial ecosystems.