Progressively warmer and drier climatic conditions impact tree phenology and carbon cycling with large consequences for forest carbon balance. However, it remains unclear how individual impacts of warming and drier soils differ from their combined effects and how species interactions modulate tree responses. Using mesocosms, we assessed the multiyear impact of continuous air warming and lower soil moisture alone or in combination on phenology, leaf-level photosynthesis, nonstructural carbohydrate concentrations, and aboveground growth of young European beech (Fagus sylvatica L.) and Downy oak (Quercus pubescens Willd.) trees. We further tested how species interactions (in monocultures and in mixtures) modulated these effects. Warming prolonged the growing season of both species but reduced growth in oak. In contrast, lower moisture did not impact phenology but reduced carbon assimilation and growth in both species. Combined impacts of warming and drier soils did not differ from their single effects. Under warmer and drier conditions, performances of both species were enhanced in mixtures compared to monocultures. Our work revealed that higher temperature and lower soil moisture have contrasting impacts on phenology vs. leaf-level assimilation and growth, with the former being driven by temperature and the latter by moisture. Furthermore, we showed a compensation in the negative impacts of chronic heat and drought by tree species interactions.