The allocation and stoichiometry of plant nutrients in leaves reflect fundamental ecosystem processes, biotic interactions, and environmental drivers such as water availability. Climate change will lead to increases in drought severity and frequency, but how canopy nutrients will respond to drought, and how these responses may vary with community composition along aridity gradients is poorly understood. We experimentally addressed this issue by reducing precipitation amounts by 66% during two consecutive growing seasons at three sites located along a natural aridity gradient. This allowed us to assess drought effects on canopy nitrogen (N) and phosphorus (P) concentrations in arid and semiarid grasslands of northern China. Along the aridity gradient, canopy nutrient concentrations were positively related to aridity, with this pattern was driven primarily by species turnover (i.e., an increase in the relative biomass of N- and P-rich species with increasing aridity). In contrast, drought imposed experimentally increased N but decreased P concentrations in plant canopies. These changes were driven by the combined effects of species turnover and intraspecific variation in leaf nutrient concentrations. In addition, the sensitivity of canopy N and P concentrations to drought varied across the three sites. Canopy nutrient concentrations were less affected by drought at drier than wetter sites, because of the opposing effects of species turnover and intraspecific variation, as well as greater drought tolerance for nutrient-rich species. These contrasting effects of long-term aridity vs. short-term drought on canopy nutrient concentrations, as well as differing sensitivities among sites in the same grassland biome, highlight the challenge of predicting ecosystem responses to future climate change.