Adjustment in leaf water status parameters and modification in xylem structure and functioning can be important elements of a tree's response to continued water limitation. In a growth trial with saplings of five co-occurring temperate broad-leaved tree species (genera Fraxinus, Acer, Carpinus, Tilia and Fagus) conducted in moist or dry soil, we compared the drought acclimation in several leaf water status and stem hydraulic parameters. Considering the extremes in the species responses, Fraxinus excelsior L. improved its leaf tissue hydration in the dry treatment through osmotic, elastic and apoplastic adjustment while Fagus sylvatica L. solely modified its xylem anatomy, which resulted in increased embolism resistance at the cost of hydraulic efficiency. Our results demonstrate the contrasting response strategies of coexisting tree species and how variable trait plasticity among species can be. The comparison of plants grown either in monoculture or in five-species mixture showed that the neighbouring species diversity can significantly influence a tree's hydraulic architecture and leaf water status regulation. Droughted Carpinus betulus L. (and to a lesser extent, Acer pseudoplatanus L.) plants developed a more efficient stem hydraulic system in heterospecific neighbourhoods, while that of F. sylvatica was generally more efficient in conspecific than heterospecific neighbourhoods. We conclude that co-occurring tree species may develop a high diversity of drought-response strategies, and exploring the full diversity of trait characteristics requires synchronous study of acclimation at the leaf and stem (and possibly also the root) levels, and consideration of physiological as well as morphological and anatomical modifications.