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Background and aims: The intensity of extreme rainfall events is increasing in many regions of the world, with important impacts on community dynamics and ecosystem functioning especially in water-limited ecosystems. The impact of the intensification of extreme precipitation on mixed communities of CAM plants and dryland C4 grasses remains poorly understood. Methods: Through a set of greenhouse experiments we investigated the effect of increasing intraseasonal rainfall variability on two separate pairs of CAM and C4 grass species (C. imbricata and B. eriopoda; O. phaeacantha and B. curtipendula) that coexist in arid grasslands across the southwest USA. Results: The increased rainfall variability did not significantly change the biomass of C. imbricata while increasing the biomass of B. eriopoda when these two species coexisted. More extreme rainfall regimes caused a 24.8% decrease in B. curtipendula (grass) biomass, compared with a 71.3% decline in the O. phaeacantha CAM plant. Significantly lower nocturnal carbon assimilation rates and higher stem volume-to-surface area ratios were found in CAM plants in mixture than in monoculture. Conclusions: Our study suggests that C4 grasses may outcompete CAM plants through greater access to deep soil water under increased rainfall variability and highlights the important role of hydrologic conditions as determinants of the competitive relations between CAM plants and grasses, their community composition, and ecological resilience in dryland ecosystems. [ABSTRACT FROM AUTHOR]