In semi-arid and arid regions, the selection of suitable grass species with high-yield production, tolerance to drought stress, and potential for recovery from drought is of special importance. Despite extensive research in cool-season grasses, inter-species differences in post-drought recovery, persistence, survival, and summer dormancy and their relationship with drought tolerance need more investigation. In the present study, 28 diverse genotypes belonged to seven cool-season grass species, including Festuca arundinacea (tall fescue), Festuca pratensis (meadow fescue), Festuca ovina (sheep fescue), Festuca rubra (red fescue), Lolium perenne (perennial ryegrass), Lolium multiflorum (Italian ryegrass) and Lolium × hybridum were evaluated during 2016–2019 under three irrigation regimes (normal, mild, and intense drought stress). Then in the fourth year (on August 2019), irrigation was withheld at all previous irrigation regimes for two months during summer, and then species were re-irrigated to study the effect of prolonged drought conditions. A wide range of genetic diversity was detected in all the measured traits among and within species in response to different irrigation levels. Recurrent drought stress decreased forage productivity, post-drought recovery, and survival in all grass species. Among the studied species, tall fescue had higher forage production, drought tolerance, survival, recovery rate, and persistence. Sheep fescue had low forage production and recovery after drought. Drought tolerance (based on stress tolerance score, STS) was highly associated with forage yield and post-drought recovery and partially with summer dormancy under both mild and intense drought stress conditions. This indicated that selection based on higher STS would lead to choosing genotypes with better recovery after prolonged drought. Superior species and preferable genotypes for forage use from species Festuca arundinacea and for turf application from species Festuca arundinacea, Lolium perenne and Lolium × hybridum were identified across different water environments for future programs.