© 2015 Ashbacher and Cleland. In the coming decades, rainfall in many Mediterranean-type ecosystems is expected to decline overall, but also become more variable interannually. Historically plant communities in these regions have been dominated by native shrubs, but are becoming increasingly invaded by exotic annual species, making it important to evaluate how native versus exotic species will respond to shifting rainfall patterns associated with climate change. Exotic species are often found to possess a suite of traits associated with fast growth and resource uptake, as well as high plasticity in traits. Hence, we hypothesized that exotic species would benefit disproportionately over native species under high rainfall conditions, while native species with more conservative growth strategies would better tolerate drought. We evaluated these expectations by manipulating rainfall (five levels, from total exclusion to a doubling of ambient rainfall) over plots containing a mix of herbaceous exotic species, mature native shrubs, and planted shrub seedlings, and measured functional trait and growth responses of focal species. We found significant variation among groups in their response to variation in rainfall quantity: growth of exotic herbaceous species was higher in response to high rainfall, and lower in response to drought, compared with native adult shrubs, with juvenile shrubs having an intermediate response. In contrast with these growth responses, functional traits of native and exotic species responded similarly to experimental variation in rainfall. Further, although we found exotic species possessed thinner leaves and higher photosynthetic capacity, neither mean trait values nor trait plasticity were predictive of species-level responses to altered rainfall in this system. We conclude that while some functional traits often predict community composition across large environmental gradients, traits may not predict species responses to environmental change at local scales with limited species pools.