Severe drought and insect outbreaks have caused widespread mortality and dieback of trees in semiarid woodlands. Despite the extent and severity of these dieback events, little is known about how the woodland understory vegetation responds to severe drought and whether that response is mediated by changes to the tree layer. We sampled understory vegetation of 98 plots in 25 pinyon-juniper woodland sites in central Nevada with varying amounts of dieback, during the third yr of a severe regional drought. Twenty-five of these plots had predrought baseline data. We related covers of perennial grasses, perennial forbs, shrubs, and the exotic invasive cheatgrass to gradients of aridity, tree cover, soil water capacity, and tree dieback. Between 2005 and 2015, the covers of perennial grasses and forbs declined, while shrub cover remained mostly unchanged. We found that the greatest understory cover was associated with lower tree cover and greater tree dieback. We did not find evidence for rapid colonization of microhabitats created by tree mortality. The site-level response of vegetation to tree dieback depended on aridity: For both perennial grasses and cheatgrass, tree mortality had a positive effect only on dry sites. Cheatgrass abundance increased the most at dry sites with tree dieback, and almost every site with substantial dieback also had cheatgrass present. Our results show differential effects of drought and tree dieback on understory functional types, which may affect the postdrought successional trajectory of drought-impacted pinyon-juniper stands. Further research is needed to determine the mechanisms by which tree mortality affects the understory, whether through altering the litter layer, light levels, or soil water, and whether these effects persist over longer timescales.