The European CARBOEUROPE/FLUXNET monitoring sites, spatial remote sensing observations via the EOS-MODIS sensor and ecosystem modelling provide independent and complementary views on the effect of the 2003 heatwave on the European biosphere's productivity and carbon balance. In our analysis, these data streams consistently demonstrate a strong negative anomaly of the primary productivity during the summer of 2003. FLUXNET eddy-covariance data indicate that the drop in productivity was not primarily caused by high temperatures (‘heat stress’) but rather by limitation of water (drought stress) and that, contrary to the classical expectation about a heat wave, not only gross primary productivity but also ecosystem respiration declined by up to more than to 80 gC m−2 month−1. Anomalies of carbon and water fluxes were strongly correlated. While there are large between-site differences in water-use efficiency (WUE, 1–6 kg C kg−1 H2O) here defined as gross carbon uptake divided by evapotranspiration (WUE=GPP/ET), the year-to-year changes in WUE were small (<1 g kg−1) and quite similar for most sites (i.e. WUE decreased during the year of the heatwave). Remote sensing data from MODIS and AVHRR both indicate a strong negative anomaly of the fraction of absorbed photosynthetically active radiation in summer 2003, at more than five standard deviations of the previous years. The spatial differentiation of this anomaly follows climatic and land-use patterns: Largest anomalies occur in the centre of the meteorological anomaly (central Western Europe) and in areas dominated by crops or grassland. A preliminary model intercomparison along a gradient from data-oriented models to process-oriented models indicates that all approaches are similarly describing the spatial pattern of ecosystem sensitivity to the climatic 2003 event with major exceptions in the Alps and parts of Eastern Europe, but differed with respect to their interannual variability.