Understanding the long-term hydroclimatic variation in the mountainous region of South Asia (northern Pakistan) is essential for forecasting future water security and environmental changes. In this study, we developed a 586 year regional tree-ring width chronology using standard dendrochronological techniques on Picea smithiana (Wall.) Boiss, samples collected from lower elevations in the Chara and Naltar valleys of Gilgit-Baltistan. Correlation analysis indicates a significant positive relationship between tree growth and summer precipitation as well as the Palmer Drought Severity Index (PDSI) (p < 0.01), while a negative correlation was observed with summer temperatures. We used a linear regression model to reconstruct the summer (June–August) PDSI for the period 1431–2016 CE based on the relationship between regional chronology and climate data. This model accounted for 37.6% of the actual PDSI variation observed during the calibration period from 1956 to 2016 CE. The reconstruction identifies key hydroclimatic events, notably an extended severe drought from 1601 to 1608 (−0.87 ± 0.31), and a prolonged drought interval 1537–1549 (−0.61 ± 0.18). An extreme wet period was recorded in 1522–1533 (0.91 ± 0.32), whereas repeated decadal drought events were observed in the late 18th and early 19th centuries. Spatial correlation analyses demonstrate the impact of large-scale climatic drivers, such as sea surface temperature anomalies in the Indian and Pacific Oceans, and underscore the significance of monsoon variability in determining regional moisture patterns. Our reconstruction, derived from the multitaper spectrum and Morlet wavelet spectrum analysis, exhibited significant periodicities of 47.9, 27, 21.8, and 2–3 years. The three periodicities likely correspond to the Pacific decadal oscillation or the Atlantic multidecadal oscillation, whereas 2–3 cycles is strongly linked to El Niño–Southern Oscillation. Our study illustrates the essential function of tree-ring records in evaluating drought risk and underscores the wider consequences of variations in the climate in the Hindu Kush–Karakoram–Himalaya for millions of downstream populations.