During the summer of 2022, a record-breaking heatwave-drought (DH2022) hit southern China, especially in the middle and lower reaches of the Yangtze River basin (MLYR). However, its impact on regional carbon budget remains unclear. Here, we assessed the response of regional terrestrial carbon fluxes to DH2022 using Global Carbon Assimilation System (GCASv2) by assimilating OCO-2 XCO2 retrievals. Our results show that compared to 2015-2021, MLYR experienced a clear reduction in carbon uptake by 45.8 TgC (44.1%) during July-September in 2022. However, the total annual carbon sink in southern China increased by 42.8 TgC. This is due to a warm and wet spring, leading to an increase in carbon sink by 50.8 TgC and greatly compensating for the carbon losses. Our study provides a comprehensive assessment of land carbon dynamics in southern China under the influence of DH2022, enhancing understanding of the impacts of climate extremes on the regional carbon cycle.