This study investigates how biodiversity, including taxonomic and functional diversity, influences the resistance and recovery of grasslands under extreme drought conditions. Using an 11-year time-series of plant biomass data from 150 permanent grassland plots across Germany, the authors examine the relationship between biodiversity, land use intensity, and biomass fluctuations. The results show that species-rich or functionally diverse communities, associated with low land-use intensity, better buffered extreme droughts, while species-poor or fast-growing communities, associated with high land-use intensity, had higher recovery capabilities after moderate-to-extreme droughts. The study highlights the importance of both functional and taxonomic diversity in maintaining grassland stability under extreme climatic events and suggests that landscapes with varying land-use intensities can enhance overall grassland biomass stability. The findings provide insights into effective grassland management strategies to address the challenges posed by increasing extreme drought events.This study investigates how biodiversity, including taxonomic and functional diversity, influences the resistance and recovery of grasslands under extreme drought conditions. Using an 11-year time-series of plant biomass data from 150 permanent grassland plots across Germany, the authors examine the relationship between biodiversity, land use intensity, and biomass fluctuations. The results show that species-rich or functionally diverse communities, associated with low land-use intensity, better buffered extreme droughts, while species-poor or fast-growing communities, associated with high land-use intensity, had higher recovery capabilities after moderate-to-extreme droughts. The study highlights the importance of both functional and taxonomic diversity in maintaining grassland stability under extreme climatic events and suggests that landscapes with varying land-use intensities can enhance overall grassland biomass stability. The findings provide insights into effective grassland management strategies to address the challenges posed by increasing extreme drought events.