Amazon forests have experienced frequent and severe droughts in the past two decades. However, little is known about the large-scale legacy of droughts on carbon stocks and dynamics of forests. Using systematic sampling of forest structure measured by LiDAR waveforms from 2003 to 2008, here we show a significant loss of carbon over the entire Amazon basin at a rate of 0.3 ± 0.2 (95% CI) PgC yr-1 after the 2005 mega-drought, which continued persistently over the next 3 years (2005-2008). The changes in forest structure, captured by average LiDAR forest height and converted to above ground biomass carbon density, show an average loss of 2.35 ± 1.80 MgC ha-1 a year after (2006) in the epicenter of the drought. With more frequent droughts expected in future, forests of Amazon may lose their role as a robust sink of carbon, leading to a significant positive climate feedback and exacerbating warming trends.