AbstractIntransitive competition networks, those in which there is no single best competitor, may ensure species coexistence. However, their frequency and importance in maintaining diversity in real‐world ecosystems remain unclear. We used two large data sets from drylands and agricultural grasslands to assess: (1) the generality of intransitive competition, (2) intransitivity–richness relationships and (3) effects of two major drivers of biodiversity loss (aridity and land‐use intensification) on intransitivity and species richness. Intransitive competition occurred in > 65% of sites and was associated with higher species richness. Intransitivity increased with aridity, partly buffering its negative effects on diversity, but was decreased by intensive land use, enhancing its negative effects on diversity. These contrasting responses likely arise because intransitivity is promoted by temporal heterogeneity, which is enhanced by aridity but may decline with land‐use intensity. We show that intransitivity is widespread in nature and increases diversity, but it can be lost with environmental homogenisation.