AbstractClimate and competition interact to affect species’ performance, such as growth and survival, and help determine species distributions and coexistence. However, it is unclear how climatic conditions modulate frequency‐dependent performance, that is, how performance changes as a species becomes locally rare or common. This is critical because declines in performance as a species becomes more common (negative frequency dependence) is a signature of niche differences among species that stabilize coexistence, whereas positive frequency dependence leads to priority effects and hampers species coexistence. Here, we used dendrochronology and hierarchical models to test whether frequency‐dependent growth of sugar pine (Pinus lambertiana) depends on climatic conditions. We found that growth rates were strongly dependent on annual precipitation, but no frequency dependence was evident across all years. However, there was a strong interaction between precipitation and frequency dependence, revealing stabilizing niche differences in dry years but positive frequency dependence in wet years. These differences emerged because of precipitation‐driven changes in the direction and strength of both con‐ and heterospecific competition. Overall, these results show how stabilizing and destabilizing effects can be temporally dynamic for long‐lived species and interact with climate variation.