Flash droughts– the rapid drying of land and intensification of drought conditions - have devasting impacts to natural resources, food supplies, and the economy. Less is currently known about the drivers of flash droughts and their impact to landscape carbon losses. We leverage carbon and water cycle data from NASA OCO-2 and SMAP missions to determine the net impact of flash drought events in the U.S. on the carbon sinks. On average, pre-onset carbon uptake fully offsets post-onset losses, creating a carbon neutral biosphere over a +/- 3 month period surrounding flash drought onset. This contrasts with ecosystem models, which underestimate pre-onset uptake and overestimate post-onset loss. Furthermore, spaceborne observations of solar induced fluorescence (SIF) provide a reliable indicator of flash droughts at lead times of 2-3 months, due to feedbacks between vegetation growth and soil water loss. This study is expected to improve understanding and prediction of flash droughts.