El Niño events are known to be associated with climate extremes and have substantial impacts on the global carbon cycle. The drought induced by strong El Niño event occurred in the tropics during 2015 and 2016. However, it is still unclear to what extent the drought could affect photosynthetic activities of crop and forest in Southeast Asia. Here, we used the satellite solar-induced chlorophyll fluorescence (SIF), which is a proxy of actual photosynthesis, along with traditional vegetation indices (Enhanced Vegetation Index, EVI) and total water storage to investigate the impacts of El Niño–induced droughts on vegetation productivity of the forest and crop in the Southeast Asia. We found that SIF was more sensitive to the water stress than traditional vegetation indices (EVI) to monitor drought for both evergreen broadleaf forest and croplands in Southeast Asia. The higher solar radiation partly offset the negative effects of droughts on the vegetation productivity, leading to a larger decrease of SIF yield (SIFyield) than SIF. Therefore, SIFyield had a larger reduction and was more sensitive to precipitation deficit than SIF during the drought. The comparisons of retrieved column-average dry-air mole fraction of atmospheric carbon dioxide with SIF demonstrated the reduction of CO2 uptake by vegetation in Southeast Asia during the drought. This study highlights that SIF is more beneficial than EVI to be an indicator to characterize and monitor the dynamics of drought in tropical vegetated regions.