Both theory and evidence suggest that diversity stabilises productivity in herbaceous plant communities through a combination of overyielding, species asynchrony and favourable species interactions. However, whether these same processes also promote stability in forest ecosystems has never been tested. Using tree ring data from permanent forest plots across Europe, we show that aboveground wood production is inherently more stable through time in mixed-species forests. Faster rates of wood production (i.e. overyielding), decreased year-to-year variation in productivity through asynchronous responses of species to climate, and greater temporal stability in the growth rates of individual tree species all contributed strongly to stabilising productivity in mixed stands. Together, these findings reveal the central role of diversity in stabilising productivity in forests, and bring us closer to understanding the processes which enable diverse forests to remain productive under a wide range of environmental conditions.

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Summary1. Mixed-species forests generally sequester and store more carbon in above-ground woody biomass compared to species-poor systems. However, the mechanisms driving the positive relationship between diversity and above-ground wood production (AWP) remain unclear. 2.We investigate the role of competition for light and water as possible sources of complementarity among Iberian pine and oak species. Using tree core data from permanent plots, we test the hypotheses that (i) contrasting abilities of pines and oaks to tolerate shade will promote AWP in mixtures, while (ii) drought stress results in less room for complementarity.3. We found that pine species receive more light, develop larger crowns and grow 138-155% faster when in mixture with oaks. However, this positive effect of species mixing on growth was severely reduced under drought conditions due to increased competition for water with neighbouring oaks. In contrast to pines, oak trees were less responsive to mixing, primarily as a result of their ability to tolerate shade and water shortage. 4.Mixed pine-oak forests produce an average 48% more above-ground woody biomass compared to monocultures each year. However, the magnitude of the diversity effect on AWP fluctuates with time, decreasing noticeably in strength during drought years. Synthesis.Complementary light use strategies among neighbouring trees are critical in explaining why above-ground wood production (AWP) increases in mixed-species stands. In contrast, drought causes trees in mixture to compete more fiercely for below-ground resources, leaving less room for complementarity and causing positive diversity effects to lessen in strength. Together, these two mechanisms provide much needed context for AWP-diversity relationships in Mediterranean forests. Whether or not managing for mixed pine-oak forests proves to be beneficial for AWP is likely to depend on how climate changes in the Iberian Peninsula.

Summary Despite growing evidence that, on average, diverse forests tend to be more productive than species‐poor ones, individual studies often report strongly contrasting relationships between tree species richness and above‐ground wood production (AWP). In the attempt to reconcile these apparently inconsistent results, we explored whether the strength and shape of AWP–diversity relationships shifts along spatial and temporal environmental gradients in forests across Europe. We used tree ring data from a network of permanent forest plots distributed at six sites across Europe to estimate annual AWP over a 15‐year period (1997–2011). We then tested whether the relationship between tree species richness and AWP changes (i) across sites as a function of large‐scale gradients in climatic productivity and tree packing density and (ii) among years within each sites as a result of fluctuating climatic conditions. AWP–species richness relationships varied markedly among sites. As predicted by theory, the relationship shifted from strongly positive at sites where climate imposed a strong limitation on wood production and tree packing densities were low, to weakly negative at sites where climatic conditions for growth were most suitable. In contrast, we found no consistent effect of interannual fluctuations in climate on the strength of AWP–species richness relationships within sites. Synthesis. Our results indicate that the shape and strength of the relationship between tree diversity and forest productivity depends critically on environmental context. Across Europe, tree diversity shows the greatest potential to positively influence forest productivity at either end of the latitudinal gradient, where adverse climatic conditions limit productivity and lead to the development of less densely packed stands.

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