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As droughts become longer and more intense, impacts on terrestrial primary productivity are expected to increase progressively. Yet, some ecosystems appear to acclimate to multiyear drought, with constant or diminishing reductions in productivity as drought duration increases. We quantified the combined effects of drought duration and intensity on aboveground productivity in 74 grasslands and shrublands distributed globally. Ecosystem acclimation with multiyear drought was observed overall, except when droughts were extreme (i.e., ≤1-in-100-year likelihood of occurrence). Productivity losses after four consecutive years of extreme drought increased by ~2.5-fold compared with those of the first year. These results portend a foundational shift in ecosystem behavior if drought duration and intensity increase, from maintenance of reduced functioning over time to progressive and profound losses of productivity when droughts are extreme.