Extreme drought decreases aboveground net primary production (ANPP) in most grasslands, but the magnitude of ANPP reductions varies especially in C3-dominated grasslands. Because the mechanisms underlying such differential ecosystem responses to drought are not well-resolved, we experimentally imposed an extreme 4-year drought (2015-2018) in two C3 grasslands that differed in aridity. These sites had similar annual precipitation and dominant grass species (Leymus chinensis) but different annual temperatures and thus water availability. Drought treatments differentially affected these two semiarid grasslands with ANPP of the drier site reduced more than at the wetter site. Structural equation modeling revealed that community-weighted means for some traits modified relationships between soil moisture and ANPP, often due to intraspecific variation. Specifically, drought reduced community mean plant height at both sites, resulting in a reduction in ANPP beyond that attributable to reduced soil moisture alone. Higher community mean leaf carbon content enhanced the negative effects of drought on ANPP at the drier site, and ANPP-soil moisture relationships were influenced by soil C:N ratio at the wetter site. Importantly, neither species richness nor functional dispersion were significantly correlated with ANPP at either site. Overall, as expected, soil moisture was a dominant, direct driver of ANPP response to drought, but differential sensitivity to drought in these two grasslands was also related to soil fertility and plant traits.