Climate change can have major consequences for grassland communities since the different species of the community utilize different mechanisms for adaptation to drought and elevated CO2 levels. In addition, contradictory data exist when the combined effects of elevated CO2 and drought are analyzed because the soil water content is not usually similar between CO2 concentrations. Thus, the objectives of this work have been to examine the effect of water stress on plant water relations in two grassland species (Trifolium pratense and Agrostis capillaris), analyzing the possible differences between the two species when soil water content is equal in all treatments, and to elucidate if development under elevated CO2 increases drought tolerance and if so, which are the underlying mechanisms. At ambient CO2, when soil volumetric water content was 15%, both species decreased their water potential in order to continue taking up water. Trifolium pratense performed osmotic adjustment, while Agrostis capillaris decreased the rigidity of its cell wall; moreover, both species increased the root to shoot ratio and decreased leaf area. However, these mechanisms were not sufficient to maintain cell turgor. Elevated CO2 partially mitigated the negative impact of drought on turgor potential in Trifolium pratense through a higher osmotic adjustment and root to shoot ratio and in Agrostis capillaris through a higher leaf relative water content caused by higher hydraulic conductance, but the impact of drought was not mitigated in either species by higher soil water conservation.