To date, the implications of the predicted greater intra‐annual variability and extremes in precipitation on ecosystem functioning have received little attention. This study presents results on leaf‐level physiological responses of five species covering the functional groups grasses, forbs, and legumes in the understorey of a Mediterranean oak woodland, with increasing precipitation variability, without altering total annual precipitation inputs. Although extending the dry period between precipitation events from 3 to 6 weeks led to increased soil moisture deficit, overall treatment effects on photosynthetic performance were not observed in the studied species. This resilience to prolonged water stress was explained by different physiological and morphological strategies to withstand periods below the wilting point, that is, isohydric behavior in Agrostis, Rumex, and Tuberaria, leaf succulence in Rumex, and taproots in Tolpis. In addition, quick recovery upon irrigation events and species‐specific adaptations of water‐use efficiency with longer dry periods and larger precipitation events contributed to the observed resilience in productivity of the annual plant community. Although none of the species exhibited a change in cover with increasing precipitation variability, leaf physiology of the legume Ornithopus exhibited signs of sensitivity to moisture deficit, which may have implications for the agricultural practice of seeding legume‐rich mixtures in Mediterranean grassland‐type systems. This highlights the need for long‐term precipitation manipulation experiments to capture possible directional changes in species composition and seed bank development, which can subsequently affect ecosystem state and functioning.