Human‐induced climate change has intensified negative impacts on socioeconomic factors, the environment, and biodiversity, including changes in rainfall patterns and an increase in global average temperatures. Drylands are particularly at risk, with projections suggesting they will become hotter, drier, and less suitable for a significant portion of their species, potentially leading to mammal defaunation. We use ecological niche modelling and community ecology biodiversity metrics to examine potential geographical range shifts of non‐volant mammal species in the largest Neotropical dryland, the Caatinga, and evaluate impacts of climate change on mammal assemblages. According to projections, 85% of the mammal species will lose suitable habitats, with one quarter of species projected to completely lose suitable habitats by 2060. This will result in a decrease in species richness for more than 90% of assemblages and an increase in compositional similarity to nearby assemblages (i.e., reduction in spatial beta diversity) for 70% of the assemblages. Small‐sized mammals will be the most impacted and lose most of their suitable habitats, especially in highlands. The scenario is even worse in the eastern half of Caatinga where habitat destruction already prevails, compounding the threats faced by species there. While species‐specific responses can vary with respect to dispersal, behavior, and energy requirements, our findings indicate that climate change can drive mammal assemblages to biotic homogenization and species loss, with drastic changes in assemblage trophic structure. For successful long‐term socioenvironmental policy and conservation planning, it is critical that findings from biodiversity forecasts are considered.