Most mistletoes are xylem-tapping hemiparasites, which derive their resources from the host’s xylem solution. Thus, they affect the host’s water relations and resource balance. To understand the physiological mechanisms underlying the mistletoe–host relationship, we experimentally removed Viscum album ssp. austriacum (Wiesb.) Vollmann from adult Pinus sylvestris L. host trees growing in a Swiss dry valley. We analyzed the effects of mistletoe removal over time on host tree growth and on concentrations of nonstructural carbohydrates (NSC) and nitrogen (N) in needles, fine roots and sapwood. In addition, we assessed the δ¹³C and δ¹⁸O in host tree rings. After mistletoe removal, δ¹³C did not change in newly produced tree rings compared with tree rings in control trees (still infected with mistletoe), but δ¹⁸O values increased. This pattern might be interpreted as a decrease in assimilation (A) and stomatal conductance (g_s), but in our study, it most likely points to an inadequacy of the dual isotope approach. Instead, we interpret the unchanged δ¹³C in tree rings upon mistletoe removal as a balanced increase in A and g_s that resulted in a constant intrinsic water use efficiency (defined as A/g_s). Needle area-based concentrations of N, soluble sugars and NSC, as well as needle length, single needle area, tree ring width and shoot growth, were significantly higher in trees from which mistletoe was removed than in control trees. This finding suggests that mistletoe removal results in increased N availability and carbon gain, which in turn leads to increased growth rates of the hosts. Hence, in areas where mistletoe is common and the population is large, mistletoe management (e.g., removal) may be needed to improve the host vigor, growth rate and productivity, especially for relatively small trees and crop trees in xeric growth conditions.