Changes in climate, land use and management have led to an increase in woody species encroachment into grasslands, threatening key ecosystem services and resilience. This study uses dendroecological techniques to investigate acclimation strategies of two native woody species, Juniperus virginiana and Pinus ponderosa, to spatial and temporal variability in precipitation and stand density in Nebraska (NE). Two locations in Eastern NE and one in Western NE, were selected and tree cores for ring-width measurements were collected. Stable Isotope ratios of carbon were analysed to investigate water use efficiency (WUE), and stable isotope ratios of oxygen were used to understand stomatal conductance and control. Our results showed trees in dense stands exhibited less intra-specific variability in response to climate and narrower tree rings than sparse open stands, with P. ponderosa being more responsive to density and climate variability than J. virginiana. Populations in the drier Sandhills grasslands of Western NE were more dependent on intra- and inter-annual precipitation and generally more impacted by drought events than those in the East. Eastern NE trees were less limited by drought and displayed lower WUE relative to Western location, even though temperatures were slightly higher, but this was compensated for by the overall higher precipitation levels in the East. Generally, above average winter temperatures were positively correlated with ring widths, while temperature extremes during the growing season were negatively correlated. Although years of extreme drought events were visible in the tree-ring width patterns for both species independent of stand density and location, it seems that once the trees are established and have access to soil moisture, the current climate variability and extremes in NE do not limit or cause a permanent decline in growth of either species.