The 2018–2019 Central European drought was probably the most extreme in Germany since the early sixteenth century. We assess the multiple consequences of the drought for natural systems, the economy and human health in the German part of the Elbe River basin, an area of 97,175 km2 including the cities of Berlin and Hamburg and contributing about 18% to the German GDP. We employ meteorological, hydrological and socio-economic data to build a comprehensive picture of the drought severity, its multiple effects and cross-sectoral consequences in the basin. Time series of different drought indices illustrate the severity of the 2018–2019 drought and how it progressed from meteorological water deficits via soil water depletion towards low groundwater levels and river runoff, and losses in vegetation productivity. The event resulted in severe production losses in agriculture (minus 20–40% for staple crops) and forestry (especially through forced logging of damaged wood: 25.1 million tons in 2018–2020 compared to only 3.4 million tons in 2015–2017), while other economic sectors remained largely unaffected. However, there is no guarantee that this socio-economic stability will be sustained in future drought events; this is discussed in the light of 2022, another dry year holding the potential for a compound crisis. Given the increased probability for more intense and long-lasting droughts in most parts of Europe, this example of actual cross-sectoral drought impacts will be relevant for drought awareness and preparation planning in other regions.