Climate change associated with a greater variability of inter- and intra-annual droughts and the occurrence of extreme events, act in combination to present challenges for semi-natural and sown productive grasslands in Europe. Successful plant strategies under drought strongly depend on stress intensity. Drought resistance to maintain leaf growth under moderate stress exhibits trade-offs with drought survival after cessation of growth under life-threatening drought conditions. Substantial intra-specific variability exists in key forage grasses originating from the Mediterranean to the cool-temperate climates, and represents a great potential for adaptation of future ecotypes and cultivars to a larger range of drought intensities. Plant species diversity offers an opportunity to stabilize forage production in two ways. First, growth reduction under stress is significantly smaller for diverse compared to simple plant communities because diverse communities offer the opportunity to include drought-resistant (or drought-surviving) species. Second, positive interactions among species increase ecosystem functioning of more diverse plant communities under moderate drought, allowing them to compensate for drought-induced yield reductions. Currently, available cultivars of perennial forage species adapted to dry climate are still rare, and only a few forage species are used in productive systems. Thus, both intra- and inter-specific plant diversity should be better valued to reduce vulnerability and increase resilience of productive grasslands.