The most accurate understanding of forest functioning during drought is crucial to improve the forecast of future forest productivity. Here we investigate the ecophysiological responses (i.e. primary production, evapotranspiration and water use efficiency) of European beech to drought events with the ecosystem model MuSICA, using as benchmark the observed fluxes at the experimental forest Hesse (France). We show that MuSICA is able to realistically simulate observed drought-induced limitations. Subsequently we use simulation experiments to provide: (1) a quantification of the reduction of ecosystem fluxes during the 2003 drought, (2) a partitioning of heat stress and water limitations during droughts, (3) an analysis of the impact of specific drought trajectories, and (4) an evaluation of the potential impact of projected climate change on the studied forest and (5) over the beech distributional range. Our results show that the 2003 drought resulted in a 17% reduction of annual gross primary production and in a 21% reduction of evapotranspiration at Hesse. The studied forest ecosystem is mostly sensitive to negative precipitation anomalies (82% of the reduced forest productivity in 2003) and almost insensitive to heat stress due to high temperatures (16%). Moreover, we show that the ecosystem fluxes are limited more by fast drought onsets in the early growing season (June-July) than by onsets later in the season. Deciphering the impact of future climate change on beech productivity is complicated by large uncertainties in projected future precipitation and in the severity of extreme dry years. Drastic reduction of ecosystem fluxes is only predicted with climate projections that show marked reductions in precipitation. However, increased CO2 fertilization in the future will counterbalance negative drought impacts. This modelling-based study improves our understanding of the functioning of an emblematic European tree species during extreme events and informs on potential future forest responses to projected climate change.