Enhancing resilience to climate change is a key management goal for Mediterranean ecosystems. Typically, these management plans are based on ecological knowledge of species’ tolerances derived from local studies limited in time and space. Remote sensing provides opportunities to study resilience over larger scales, but the tools needed to quantify the resilience of forests to drought and evaluate the effectiveness of management plans remain limited. This thesis examines how freely available satellite data can be used to quantify changes in forest canopies in response to climate variability. Using a combination of time-series and break-point analyses of satellite imagery I resolve limitations in forest resilience estimation and show that, for Spanish woodlands, the relative water availability during and following drought events are important in driving the canopy greenness loss and recovery. I show that despite increasing aridity, and examples of localised die-back events, Spanish forests are mostly becoming denser, with only 12% of locations analysed declining in greenness over the 18-year study period. This work demonstrates the importance of large-scale remote sensing analyses for obtaining an objective perspective on drought impacts. The thesis then explores the potential of remote sensing to map tree species in a region of regenerating woodlands near Madrid, providing the information needed for a nuanced understanding of resilience. I found that tree classification using high-resolution airborne hyperspectral imagery was highly accurate, while species maps produced using Sentinel 2 imagery (multispectral data with 10-m spatial resolution) were less successful at identifying species, with average agreement of 64% with the airborne derived map. Following on from this work, I used areas with high classification agreement between the airborne and spaceborne species information to study the effect of species composition on forest responses to droughts. I identify contrasting responses of the canopy greenness and wood production to drought. Specifically, wood production was found to be more sensitive to changes in water availability than canopy greenness. For the oak species, wood production was mirrored by changes in canopy greenness, but black pines reduced their wood production during droughts without substantial reduction in canopy greenness. I investigate the differences between the species and the mixing effects further by studying foliar compositions during a dry summer in Spain. There were strong differences between pines and oaks in the stable isotope ratios of carbon, probably driven by underlying differences in water-use efficiency, and differences in the stable isotope ratios of nitrogen, probably driven by underlying differences in species’ investments in the photosynthetic apparatus. I conclude by highlighting the implications of my research for studying the relationships between diversity and ecosystem functioning from space.