Recent Amazonian droughts have drawn attention to the vulnerability of tropical forests to climate perturbations. Satellite and in situ observations have shown an increase in fire occurrence during drought years and tree mortality following severe droughts, but to date there has been no assessment of long-term impacts of these droughts across landscapes in Amazonia. Here, we use satellite microwave observations of rainfall and canopy backscatter to show that more than 70 million hectares of forest in western Amazonia experienced a strong water deficit during the dry season of 2005 and a closely corresponding decline in canopy structure and moisture. Remarkably, and despite the gradual recovery in total rainfall in subsequent years, the decrease in canopy backscatter persisted until the next major drought, in 2010. The decline in backscatter is attributed to changes in structure and water content associated with the forest upper canopy. The persistence of low backscatter supports the slow recovery (>4 y) of forest canopy structure after the severe drought in 2005. The result suggests that the occurrence of droughts in Amazonia at 5-10 y frequency may lead to persistent alteration of the forest canopy.