Understanding of plant hydraulic strategies (i.e. the degree of iso-/anisohydricity) is crucial to predict the response of plants to changing environmental conditions such as climate-change induced extreme drought. Several abiotic factors, including evaporative demand, have been shown to seasonally modify the isohydricity of plants. However, the impact of biotic factors such as plant-plant interactions on hydraulic strategies has seldom been explored. Here, we investigated adaptations and changes in hydraulic strategies of two woody species in response to seasonal abiotic conditions, experimental drought and plant invasion in a Mediterranean cork oak (Quercus suber) ecosystem with a combined shrub invasion (Cistus ladanifer) and rain exclusion experiment. From the dry to wet season, Q. suber shifted from a partial isohydric to an anisohydric behaviour while C. ladanifer shifted from strict anisohydric to partial isohydric. During drought, water competition by plant invasion significantly modified the hydraulic strategy of invaded Q. suber, which was accompanied by lower pre-dawn leaf water potentials, sap flow density, leaf area index and trunk increment rates. This altered isohydricity of invaded Q. suber trees was most likely caused by interspecific competition for water resources by water spending C. ladanifer shrubs. Both species do have the highest proportion of fine roots in the topsoil and thus, an additional water consumer, such as C. ladanifer can lead to more stressful conditions for Q. suber during times of water scarcity. Further underlying mechanisms of the altered isohydricity of Q. suber, such as potential allelopathic effects of C. ladanifer exudates on root growth of Q. suber, have to be investigated in the future. In conclusion, we demonstrate that the degree of isohydricity of two woody Mediterranean plant species is dynamically determined by the interplay of species-specific hydraulic traits and their abiotic and biotic environment. Read the free Plain Language Summary for this article on the Journal blog.