Understanding the mechanisms underlying the response of different plant functional types to current and projected changes in rainfall is particularly important in drought-prone areas like the Mediterranean. Here, we report the responses of two species with contrasting leaf characteristics and post-fire regeneration strategies (Cistus ladanifer L., malacophyllous, seeder; Erica arborea L., sclerophyllous, resprouter) to a manipulative field experiment that simulated a severe drought (45% reduction of historical average rainfall). We measured monthly changes in relative growth rate (RGR), specific leaf area (SLA), bulk leaf carbon isotope composition (delta C-13), predawn water potential (Psi(pd)), photosynthetic gas exchange, bulk modulus of elasticity and osmotic potential at maximum turgor (pi). Temporal (monthly) changes in RGR of C. ladanifer were correlated with all measured leaf traits (except pi) and followed Psi(pd) variation. However, the temporal pattern of RGR in E. arborea was largely unrelated to water availability. SLA monthly variation reflected RGR variation reasonably well in C. ladanifer, but not in E. arborea, in which shoot growth and delta C-13 increased at the time of maximum water stress in late summer. The relationship between water availability, and RGR and carbon assimilation in C. ladanifer, and the lack of any relationship in E. arborea suggest that the former has an enhanced capacity to harness unpredictable rainfall pulses compared with the latter. These contrasting responses to water availability indicate that the projected changes in rainfall with global warming could alter the competitive ability of these two species, and contribute to changes in plant dominance in Mediterranean shrublands.