Forests around the world are subject to risk of high rates of tree growth decline and increased tree mortality from combinations of climate warming and drought, notably in semi-arid settings. Here, we assess how climate warming has affected tree growth in one of the world's most extensive zones of semi-arid forests, in Inner Asia, a region where lack of data limits our understanding of how climate change may impact forests. We show that pervasive tree growth declines since 1994 in Inner Asia have been confined to semi-arid forests, where growing season water stress has been rising due to warming-induced increases in atmospheric moisture demand. A causal link between increasing drought and declining growth at semi-arid sites is corroborated by correlation analyses comparing annual climate data to records of tree-ring widths. These ring-width records tend to be substantially more sensitive to drought variability at semi-arid sites than at semi-humid sites. Fire occurrence and insect/pathogen attacks have increased in tandem with the most recent (2007–2009) documented episode of tree mortality. If warming in Inner Asia continues, further increases in forest stress and tree mortality could be expected, potentially driving the eventual regional loss of current semi-arid forests.