This dataset comprises co-aligned hyperspectral and LiDAR data collected of European beech (Fagus sylvatica) forest within core protected areas of the UNESCO Rhӧn Biosphere Reserve, Germany. Data was collected using the Headwall Hyperspec Nano sensor flown from a unmanned aerial vehicle (UAV) in September 2020. The dataset comprises image and LiDAR data of four sites, each approximately 8ha in size. The study forests were subject to the extreme drought event that impacted central Europe in 2018/2019 and this project sought to collect data to enable individual tree and stand level assessment of the response (canopy damage and defoliation) of European beech trees to extreme drought events. The hyperspectral images available in this dataset have approx. 5cm pixel size with an associated LiDAR dataset and are suitable for identifying individual trees and the degree of canopy damage (defoliation, discolouration, and mortality) sustained by individuals/stands within the forest. The work was supported by the Natural Environment Research Council (Grant NE/V00929X/1). Full details about this dataset can be found at https://doi.org/10.5285/23d6a61c-c1cf-4c1b-a65c-f3fe42fc0e76