Climate change is predicted to result in more severe weather events, including drought, which will affect forage production in agricultural grasslands. We evaluated the effects of an experimentally imposed drought on yields of monocultures and mixtures of intensively managed grassland communities comprising four species with contrasting functional traits (Lolium perenne L., Cichorium intybus L., Trifolium repens L., Trifolium pratense L.). Complete exclusion of precipitation was implemented in a common field experiment at two sites, resulting in an experimental drought at Wexford (Ireland) and Zürich (Switzerland). In the individual harvest at the end of the drought event, very strong yield reductions (up to −87%) occurred across all communities. In contrast, drought effects on annual yields of averaged monocultures and the equi-proportional four-species mixture were only −9% and −12%, respectively. These losses were much smaller than the yield advantage due to mixtures, which were 31% under drought and 34% under rainfed conditions. The large effect of mixtures on annual yield is attributed to complementarity among species with contrasting functional traits, and to mixture effects being active over the whole growing season and under drought. We attribute these relatively small drought effects on annual yield to the immediate recovery in harvest yields when soil water supply increased after the drought (resilience), the buffering effect of soil water at the beginning of rain exclusion, and the relatively long growing season that diluted the short-term effect of the drought event.