1.There is mounting evidence that species diversity increases the temporal stability of forest growth. This stabilising effect of diversity has mainly been attributed to species differences in their response to fluctuating environmental conditions. Interactions among individuals could also contribute to the stabilising effect of diversity by increasing the mean and reducing the variance of tree growth, however, this has never been directly demonstrated. 2.We used tree‐ring width chronologies from temperate and boreal mixed stands of Eastern Canada to identify the role of interactions among individuals in the stabilising effect of diversity on forest growth. Using neighbourhood competition index and a mixed model we compared the effect of interspecific and intraspecific interactions on the mean and the variance of tree growth. 3.We found that interspecific interactions are less detrimental to tree growth than intraspecific interactions. We also found that interspecific interactions buffer tree response to drought and thereby reduce the variance of tree growth. 4.Our results indicate diversity may increase the mean and reduce the variance of tree growth through interactions among individuals. Thus, we demonstrate interactions among individuals play a role in the stabilising effect of diversity on forest growth, and in doing so, we bring to light other mechanisms of the insurance hypothesis.