Climate change is posing an increasingly serious threat to the health and functionality of forests worldwide, underlining the urgent need to develop a deeper understanding of how trees adapt to changing environmental conditions. While tree individuals use various morphological adaptations to increase their drought tolerance, the way in which these adaptations interact with different competitive conditions is poorly understood. This study investigates the influence of intraspecific competition and available water capacity (AWC) of the soil on the above- and belowground traits of mature European beech (Fagus sylvatica L.) trees in nine stands in Germany. We analysed the interaction between competition and AWC using linear mixed models, employing the Hegyi competition index and high-resolution measurements of crown and fine root traits. Our results showed that trees under intense competition formed smaller, narrower crowns. This effect strengthened with increasing AWC. Under stronger competition or low AWC, trees grew longer and thinner fine roots to improve their water uptake. This allocation to the tree part that acquires the limiting resource, i.e., fine roots for water acquisition at low AWC, suggests high allocation plasticity in beech trees. To improve the survival of beech trees, particularly in drought-prone stands, it could be beneficial to reduce competition intensity by reducing stand density. To better understand and cope with the effects of climate change, we recommend that future research and forest management adopt a whole-tree perspective.