Water-use efficiency (WUE) is one of the major axes of ecosystem functioning and an indicator for ecosystem health, but its variability due to climate change and droughts has not yet been thoroughly understood. Here, we use remote sensing and reanalysis data to map the trends and responses to droughts of three WUE indices from 1995 – 2018 in Europe. Further, we conduct a causal network discovery analysis to identify drivers of in WUE change. We found an increasing trends of photosynthesis per canopy conductance (IWUE) in forests and grasslands. IWUE also increased during droughts over whole Europe but this was not translated into an increase of photosythesis per water evaporated (i.e. increased EWUE). We highlight that the WUE indices are predominantly explained by ecohydrological variability, which underlines the role of water demand and supply to ecosystem function in Europe.