Due to climate change, an increasing frequency and severity of drought events are expected to impair grassland productivity, particularly of intensively managed temperate grasslands. To assess drought impacts, a common field experiment to manipulate precipitation was set up at three sites (two Swiss and one Irish) using monocultures and mixtures with two and four key forage species. Species differed in their functional traits: a shallow-rooted non-legume (Lolium perenne L.), a deep-rooted non-legume (Cichorium intybus L.), a shallow-rooted legume (Trifolium repens L.) and a deep-rooted legume (Trifolium pratense L.). A nine-week summer drought was simulated and soil water status and above-ground biomass yield were compared to a rainfed control. Based on soil water measurements, the drought induced severe stress at both Swiss sites and extreme stress at the Irish site. Under severe drought, the legumes were more drought-resistant and showed an average change in above-ground biomass (CAB, compared to rainfed control) of only -8% and -24% (for the two Swiss sites) while the non-legumes had an average CAB of -51% and -68%. However, under extreme drought, all species were substantially impaired, with an average CAB of -85%. During a six-week post-drought period with adequate water supply (Swiss sites), formerly drought-stressed species were highly resilient and attained (legumes) or clearly outperformed (non-legumes) the yield level of the rainfed controls. As a result, aggregated over the drought and the post-drought periods, a negative drought impact was largely absent. Significant overyielding by multi-species mixtures was evident under rainfed control (+38% predicted CAB across all sites, P < 0.05) and persisted under severe drought conditions (+50%, P < 0.05). This overyielding was so large that drought-stressed mixtures at least attained the same yield as the average of the rainfed monocultures. Yields of selected species of intensively managed temperate grasslands are either resistant to a single severe drought or are highly resilient as soon as soil moisture levels recover after the drought event. Combining species in mixtures can compensate for yield reductions caused by severe drought and it offers a practical management tool to adapt forage production to climate change.