Taste and odor issues in drinking water, often attributed to compounds such as 2-methylisoborneol (2-MIB) and geosmin (GSM), pose significant challenges for the management of drinking water reservoirs. The conditions and mechanisms leading to the occurrence of these compounds, particularly under extreme weather events, remain unclear. The Shahe Reservoir, a mountainous and minimally polluted reservoir serving 800,000 people, experienced a severe drought in summer 2022, followed by water recharge diverted from its spillway. In 2023, an outbreak of 2-MIB occurred, peaking at 264.7 ng/L, 26 times above the odor threshold. Reservoir nitrogen and phosphorus rose sharply after the diversion project commenced, reaching 2 and 3 times higher than in the previous 3 years. The combination of persistently low water level in 2022 (3 m below the historical average of 21 m), elevated nutrients, optimal water temperatures, and favorable light conditions facilitated the proliferation of Pseudanabaena sp. in spring 2023. Cell counts of this species, identified as the primary producer of 2-MIB, were positively and significantly correlated with 2-MIB concentrations (R = 0.43, P < 0.001). This study highlighted how extreme drought exacerbated reservoir vulnerability to algal blooms and taste and odor issues. While strategies including water recharge are essential for maintaining supply during droughts, they may inadvertently boost cyanobacterial growth and odor issues by introducing additional nutrients. To enhance water supply resilience under extreme weather events, reservoir managers should adopt adaptive measures such as optimizing water levels and inflow timing and controlling nutrient inputs from both external and internal sources.