Climatic extreme events are expected to occur more frequently in the future, increasing the likelihood of unprecedented climate extremes (UCEs), or record-breaking events. UCEs, such as extreme heatwaves and droughts, substantially affect ecosystem stability and carbon cycling by increasing plant mortality and delaying ecosystem recovery. Quantitative knowledge of such effects is limited due to the paucity of experiments focusing on extreme climatic events beyond the range of historical experience. Here, we use two dynamic vegetation demographic models (VDMs), ED2 and LPJ-GUESS, to investigate the hypothesis that ecosystem responses to UCEs (e.g., unprecedented droughts) differ qualitatively from ecosystem responses to milder extremes, as a result of non-linear ecosystem responses. Additionally, we explore how unprecedented droughts in combination with increasing atmospheric CO2 and/or temperature may affect ecosystem stability and carbon cycling. We explored these questions using simulations of pre-drought and post-drought conditions at well-studied forest sites in Australia and Costa Rica. Both models produced nonlinear responses to UCEs. Due to the two models having different but plausible representations of processes and interactions, they diverge in sensitivity of biomass loss due to drought duration or intensity, and differ between each site. Biomass losses are most sensitive to drought duration in ED2, but to drought intensity in LPJ-GUESS. Elevated atmospheric CO2 concentrations (eCO2) alone did not completely buffer the ecosystems from carbon losses during UCEs in the majority of our simulations. Our findings highlight contrasting differences in process formulations and uncertainties in models, notably related to availability in plant carbohydrate storage and the diversity of plant hydraulic schemes, in projecting potential ecosystem responses to UCEs. The different hypotheses of plant responses to UCEs existing in models reflect knowledge gaps, which should be tested with targeted field experiments. This iterative modeling-experimental framework would help improve predictions of terrestrial ecosystem responses and climate feedbacks.