The increasing intensity and frequency of droughts predicted for the Mediterranean basin with ongoing climate change will impact plant communities and ecosystem functioning. This study investigated the effect of severe recurrent droughts and the role of the neighbor plant identity on the growth and survival of three abundant and co-existing species of a typical Mediterranean shrubland. Two juvenile plants, either of the same species or in all possible combinations of the two woody species Quercus coccifera and Cistus albidus and the perennial grass species Brachypodium retusum were grown together in rhizotrons under controlled watering regimes for two years. Compared to a treatment with only one drought cycle, three successive droughts reduced the relative growth rates (RGR) of shoots and roots in B. retusum, but not in woody species, and increased the mortality of the woody species, but not that of the grass. The survival of C. albidus and of B. retusum, but not of Q. coccifera, increased when the neighbor individual was a different species than when it was the same species. Our data suggest that both species composition and frequency of drought events will impact the dynamics of plant communities in Mediterranean shrublands under ongoing climate change. The abundance of dehydration sensitive woody species will likely decrease under more frequent drought events at the expense of dehydration-tolerant grass species, resulting in potentially strong changes in the functioning of these ecosystems.