Plant nonstructural carbohydrates (NSC) can reflect community and ecosystem responses to environmental changes such as water availability. Climate change is predicted to increase aridity and the frequency of extreme drought events in grasslands, but it is unclear how community-scale NSC will respond to drought or how such responses may vary along aridity gradients. We experimentally imposed a 4-year drought in six grasslands along a natural aridity gradient and measured the community-weighted mean of leaf soluble sugar (SS_CWM) and total leaf NSC (NSC_CWM) concentrations. We observed a bell-shape relationship across this gradient, where SS_CWM and total NSC_CWM concentrations were lowest at intermediate aridity, with this pattern driven primarily by species turnover. Drought manipulation increased both SS_CWM and total NSC_CWM concentrations at one moderately arid grassland but decreased total NSC_CWM concentrations at one moist site. These differential responses to experimental drought depended on the relative role of species turnover and intraspecific variation in driving shifts in SS_CWM and total NSC_CWM concentrations. Specifically, the synergistic effects of species turnover and intraspecific variation drove the responses of leaf NSC concentrations to drought, while their opposing effects diminished the effect of drought on plant SS_CWM and total NSC_CWM concentrations. Plant resource strategies were more acquisitive, via higher chlorophyll_CWM concentration, to offset reduced NSC_CWM concentrations and net aboveground primary productivity (ANPP) with increasing aridity at more mesic sites, but more conservative (i.e., decreased plant height_CWM and ANPP) to reduce NSC consumption at drier sites. The relationship between water availability and NSC_CWM concentrations may contribute to community drought resistance and improve plant viability and adaptation strategies to a changing climate.