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Mountain regions in Europe are experiencing changes in temperature and precipitation patterns, as well as an increasing frequency and intensity of droughts. Periods of low precipitation reduce winter snow accumulation, while anomalous hot periods during spring and summer accelerate snowmelt, altering the water cycle and discharge patterns of mountain systems and their downstream areas. The combination of warmer and drier conditions increases water scarcity, reduces crop yields and decreases hydropower generation, with reductions in streamflow and groundwater recharge. Implementing high-resolution land surface models allow us to predict future conditions by capturing the complex behavior of flow paths and water storage across entire regions. Consequently, these models facilitate the study of future droughts and their impact on hydrological conditions within the catchment. We identify a number of droughts including snow droughts in the Central Apennines of Italy, and investigate their compounded effects on the hydrosphere, biosphere and pedosphere using a fully distributed, mechanistic land surface model (Tethys-Chloris) over two decades (from 2000 to 2020). Our model configuration resolves energy budgets and mass balances at an hourly timestep and 250 m resolution to simulate processes such as snowmelt, sublimation and plant transpiration. We force the model using a combination of stations and bias-corrected ERA5Land reanalysis data and evaluate it against streamflow measurements, snow depth, soil moisture and remote sensing products of snow-covered area and leaf area index. We analyze distributed simulations of snow depth, snow water equivalent, soil moisture, lateral subsurface water fluxes and surface temperature to obtain a highly resolved picture of the functioning of the mountain hydrological system. Our analysis shows how droughts produced by a reduction of snow accumulation, precipitation or warm temperatures produce runoff deficits and positive anomalies of evapotranspiration at high elevations. We focus in particular on the effect of evaporative fluxes in reducing water yields. Our findings indicate that warm periods lead to enhanced evapotranspiration at elevations between 1500 and 2500 m a.s.l. We also investigate the contrasting effect of snow on this so-called drought paradox, as snow provides water vital to plant functioning, but limits the growing season length. This phenomenon ultimately reduces downstream water availability in mountain regions, which impacts water security for mountain-dependent communities and ecosystems. As such, our study provides an entirely new understanding of the eco-hydrological functioning of the Central Apennines water system under drought stresses, and establishes a baseline of unprecedented resolution in time and space to predict the ecological and hydrological impacts of future droughts.