The Amazon Basin is undergoing extensive environmental degradation as a result of deforestation and the rising occurrence of fires. The degradation caused by fires is exacerbated by the occurrence of anomalously dry periods in the Amazon Basin. The objectives of this study were: (i) to quantify the extent of areas that burned between 2001 and 2019 and relate them to extreme drought events in a 20-year time series; (ii) to identify the proportion of countries comprising the Amazon Basin in which environmental degradation was strongly observed, relating the spatial patterns of fires; and (iii) examine the Amazon Basin carbon balance following the occurrence of fires. To this end, the following variables were evaluated by remote sensing between 2001 and 2019: gross primary production, standardized precipitation index, burned areas, fire foci, and carbon emissions. During the examined period, fires affected 23.78% of the total Amazon Basin. Brazil had the largest affected area (220,087 fire foci, 773,360 km2 burned area, 54.7% of the total burned in the Amazon Basin), followed by Bolivia (102,499 fire foci, 571,250 km2 burned area, 40.4%). Overall, these fires have not only affected forests in agricultural frontier areas (76.91%), but also those in indigenous lands (17.16%) and conservation units (5.93%), which are recognized as biodiversity conservation areas. During the study period, the forest absorbed 1,092,037 Mg of C, but emitted 2908 Tg of C, which is 2.66-fold greater than the C absorbed, thereby compromising the role of the forest in acting as a C sink. Our findings show that environmental degradation caused by fires is related to the occurrence of dry periods in the Amazon Basin.