In 2018–2019, large parts of Europe experienced an unprecedented multi-year drought with severe impacts on society and ecosystems. This study is among the first to analyze its impact on water quality by comparing long-term (1997–2017) nitrate export with 2018–2019 export in an intensively-monitored mesoscale catchment in Germany. We combined data-driven analysis of concentration-discharge and load-discharge relationships with process-based modelling to analyze the catchment nitrogen retention capacity and the underlying mechanisms of retention in the soils and during subsurface transport. Within the multi-year drought, we found a shift in the concentration-discharge relationship at the catchment outlet, reflecting exceptionally low riverine nitrate concentrations during dry periods and exceptionally high concentrations during subsequent wet periods. Nitrate loads during the multi-year drought were up to 70% higher than expected from the long-term relationship between discharge and loads. Model simulations suggested that this increase was driven by a decrease in denitrification and plant uptake in exceptionally dry soils and subsequent flushing of accumulated nitrogen during rewetting via fast, shallow flow paths. As a consequence, the overall capacity of the catchment to retain nitrogen was reduced, which was confirmed by model results for nitrate in the soil leachates. This observation was most evident in the upstream sub-catchments, which have relatively short transit times during wet periods (<2 months). Downstream, longer transit times (>20 years) inhibit a fast response of riverine water quality to drought conditions, which might result in a long-term drought legacy becoming visible in the future. Overall, our study reveals that a severe multi-year drought threatens water quality by intensifying nitrate pollution. This is crucial knowledge for water quality management in the face of climate change, as such droughts are predicted to become more frequent and prolonged across Europe.