AbstractSome forest‐related studies on possible effects of climate change conclude that growth potential of European beech (Fagus sylvatica L.) might be impaired by the predicted increase in future serious drought events during the growing season. Other recent research suggests that not only multiyear increment rates but also growth resistance and recovery of beech during, respectively, after dry years may differ between pure and mixed stands. Thus, we combined dendrochronological investigations and wood stable isotope measurements to further investigate the impact of neighborhood diversity on long‐term performance, short‐term drought response and soil water availability of European beech in three major geographic regions of Germany. During the last four decades, target trees whose competitive neighborhood consisted of co‐occurring species exhibited a superior growth performance compared to beeches in pure stands of the same investigation area. This general pattern was also found in exceptional dry years. Although the summer droughts of 1976 and 2003 predominantly caused stronger relative growth declines if target trees were exposed to interspecific competition, with few exceptions they still formed wider annual rings than beeches growing in close‐by monocultures. Within the same study region, recovery of standardized beech target tree radial growth was consistently slower in monospecific stands than in the neighborhood of other competitor species. These findings suggest an improved water availability of beech in mixtures what is in line with the results of the stable isotope analysis. Apparently, the magnitude of competitive complementarity determines the growth response of target beech trees in mixtures. Our investigation strongly suggest that the sensitivity of European beech to environmental constrains depends on neighborhood identity. Therefore, the systematic formation of mixed stands tends to be an appropriate silvicultural measure to mitigate the effects of global warming and droughts on growth patterns of Fagus sylvatica.