The phenotypic diversity and productivity of a diverse alfalfa (M. sativa subspp.) panel of cultivars, landraces and wild relatives with putative drought tolerance were evaluated in two Mediterranean environments (central Chile and Southern Australia). In Chile, 70 accessions were evaluated in rainfed conditions and in Australia 30 accessions under rainfed and irrigated conditions, during three growing seasons. Large phenotypic variation was observed among and within subspecies for NDVI, stem length, intercepted PAR and forage yield. Principal component analysis indicated that the first two principal components (PC) accounted for 84.2% of total variance; fall dormancy, taxa, and breeding status were closely related to the agronomical performance of alfalfa accessions. Forage yield varied largely among accessions across years and locations. A linear relationship was found between annual forage yield and annual water added to the experiments (R2 = 0.60, p < 0.001). The GxE analysis for forage yield allowed the detection of the highest yielding accessions for each of the two mega-environments identified. The accessions CTA002 and CTA003 showed greater forage yield in both Chile and Australia environments. It is concluded that new breeding lines derived from crosses between cultivated alfalfa (M. sativa subsp. sativa) and wild relatives belonging to the primary (M. sativa subsp. falcata) and tertiary (M. arborea) gene pool, achieve outstanding agronomical performance in drought-prone environments.