Hot droughts are expected to increase in Europe and disturb forest ecosystem functioning. Wood formation of trees has the potential to adapt to those events by compensatory mechanisms between the rates and durations of tracheid differentiation to form the typical pattern of vital wood anatomical structures. We monitored xylogenesis and measured wood anatomy of mature silver fir ( Abies alba Mill.) and Scots pine ( Pinus sylvestris L.) trees along an elevational gradient in the Black Forest during the hot drought year of 2018. We assessed the kinetics of tracheid differentiation and the final tracheid dimensions and quantified the relationship between rates and durations of cell differentiation over the growing season. Cell differentiation kinetics were decoupled, and temperature and water availability signals were imprinted in the tree ring structure. The sudden decline in woody biomass production provided evidence for a disruption in carbon sequestration processes due to heat and drought stress. Growth processes of Scots pine (pioneer species) were mainly affected by the spring drought, whereas silver fir (climax species) growth processes were more disturbed by the summer drought. Our study provides novel insights on the plasticity of wood formation and carbon allocation in temperate conifer tree species in response to extreme climatic events.