Over the last decades, Chile has experienced a long-term drought with significant consequences for water availability, forest productivity, and soil degradation, ultimately dramatically increasing the surface of burned area. Here, we quantify the Palmer Drought Severity Index (PDSI) to ascertain the extent of “moisture deficiency” across the central-southern region of Chile from 2000 to 2023 to assess the drought’s relationship with the frequency of wildfires focusing on the impact of native forests. Our methodology quantifies the PDSI from the burned area data using MODIS MCD64A1 satellite imagery, validated by in situ wildfire occurrence records. The findings indicate that 85.2% of fires occurred under moderate to severe drought conditions. We identified 407,561 ha showing varying degrees of degradation due to wildfires, highlighting the critical areas for targeted conservation efforts. A significant increase in both the frequency of wildfires and the extent of the affected area in native forests was observed with the intensification of drought conditions in the 21st century within mesic to humid Mediterranean climatic zones where drought explains up to 41% of the variability in the burned area (r2 = 0.41; p < 0.05). This study highlights the relationship between drought conditions and wildfire frequency, showing the paramount need to adopt comprehensive wildfire mitigation management in native forests.