Abstract Factors that determine C4 grass distributions have been well documented, with evidence in the literature for C4 photosynthetic subtypes displaying varying levels of drought susceptibility. However, the interactions between C4 photosynthetic subtype and phylogeny add complexity and are relatively under studied. We use species distribution modelling to determine the influence of rainfall on distribution patterns of representative C4 grass families and subtypes. Select C4 grass species, representing different photosynthetic subtypes (NADP‐Me and NAD‐Me) and lineages (Panicoideae and Aristidoideae), were subjected to a progressive 58‐day drought period and recovery phase, to explore drought responses through leaf water relations, gas exchange and chlorophyll fluorescence. We show Panicoideae NADP‐Me species to be more susceptible to drought than both Panicoideae NAD‐Me and Aristidoideae NADP‐Me species due to apparent greater metabolic impairment. The differences between groups were related to how rapidly photosynthesis declines with exposure to drought and the rate of recovery postdrought, rather than the maximum extent of photosynthetic decline. The mechanisms for the relative maintenance of plant water status differed between the Panicoideae NAD‐Me species, which utilized greater stomatal control, and the Aristidoideae NADP‐Me species, which maintained water uptake through osmotic adjustment. Synthesis. We show here that drought susceptibility differs both phylogenetically and according to photosynthetic subtype, but that the role of phylogeny may outweigh physiological control. This research adds novel insight into the physiological differences behind observed rainfall‐related differences in C4 grass distribution patterns. Read the free Plain Language Summary for this article on the Journal blog.