Biotic interactions play an important role in ecosystem function and structure in the face of global climate change. We tested how plant–plant interactions, namely competition and facilitation among grassland species, respond to extreme drought and heavy rainfall events. We also examined how the functional composition (grasses, forbs, legumes) of grassland communities influenced the competition intensity for grass species when facing extreme events. We exposed experimental grassland communities of different functional compositions to either an extreme single drought event or to a prolonged heavy rainfall event. Relative neighbour effect, relative crowding and interaction strength were calculated for five widespread European grassland species to quantify competition. Single climatic extremes caused species specific shifts in plant–plant interactions from facilitation to competition or vice versa but the nature of the shifts varied depending on the community composition. Facilitation by neighbouring plants was observed for Arrhenatherum elatius when subjected to drought. Contrarily, the facilitative effect of neighbours on Lotus corniculatus was transformed into competition. Heavy rainfall increased the competitive effect of neighbours on Holcus lanatus and Lotus corniculatus in communities composed of three functional groups. Competitive pressure on Geranium pratense and Plantago lanceolata was not affected by extreme weather events. Neither heavy rainfall nor extreme drought altered the overall productivity of the grassland communities. The complementary responses in competition intensity experienced by grassland species under drought suggest biotic interactions as one stabilizing mechanism for overall community performance. Understanding competitive dynamics under fluctuating resources is important for assessing plant community shifts and degree of stability of ecosystem functions.

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