Frequent Amazonian fires over the last decade have raised the alarm about the fate of the Earth’s most biodiverse forest. The increased fire frequency has been attributed to altered hydrological cycles. However, observations over the past few decades have demonstrated hydrological changes that may have opposing impacts on fire, including higher basin‐wide precipitation and increased drought frequency and severity. Here, we use multiple satellite observations and climate reanalysis datasets to demonstrate compelling evidence of increased fire susceptibility in response to climate regime shifts across Amazonia. We show that accumulated forest loss since 2000 warmed and dried the lower atmosphere, which reduced moisture recycling and resulted in increased drought extent and severity, and subsequent fire. Extremely dry and wet events accompanied with hot days have been more frequent in Amazonia due to climate shift and forest loss. Simultaneously, intensified water vapor transport from the tropical Pacific and Atlantic increased high‐altitude atmospheric humidity and heavy rainfall events, but those events did not alleviate severe and long‐lasting droughts. Amazonia fire risk is most significant in the southeastern region where tropical savannas undergo long seasonally dry periods. We also find that fires have been expanding through the wet‐dry transition season and northward to savanna‐forest transition and tropical seasonal forest regions in response to increased forest loss at the 'Arc of Deforestation'. Tropical forests, which have adapted to historically moist conditions, are less resilient and easily tip into an alternative state. Our results imply forest conservation and fire protection options to reduce the stress from positive feedback between forest loss, climate change, and fire.