Root systems perform the crucial task of absorbing water from the soil to meet the demands of a transpiring canopy. Roots are thought to operate like electrical fuses, which break when carrying an excessive load under conditions of drought stress. Yet the exact site and sequence of this dysfunction in roots remain elusive. Using in vivo x-ray computed microtomography, we found that drought-induced mechanical failure (i.e. lacunae formation) in fine root cortical cells is the initial and primary driver of reduced fine root hydraulic conductivity (Lpr) under mild to moderate drought stress. Cortical lacunae started forming under mild drought stress (20.6 MPa Ψstem), coincided with a dramatic reduction in Lpr, and preceded root shrinkage or significant xylem embolism. Only under increased drought stress was embolism formation observed in the root xylem, and it appeared first in the fine roots (50% loss of hydraulic conductivity [P50] reached at 21.8 MPa) and then in older, coarse roots (P50 = 23.5 MPa). These results suggest that cortical cells in fine roots function like hydraulic fuses that decouple plants from drying soil, thus preserving the hydraulic integrity of the plant’s vascular system under early stages of drought stress. Cortical lacunae formation led to permanent structural damage of the root cortex and nonrecoverable Lpr, pointing to a role in fine root mortality and turnover under drought stress.