Abstract Despite increasing reports of severe drought and heat impacts on forest ecosystems, community‐level processes, which could potentially modulate tree responses to climatic stress, are rarely accounted for. While numerous studies indicate a positive effect of species diversity on a wide range of ecosystem functions and services, little is known about how species interactions influence tree responses to climatic variability. We quantified the intraspecific variation in 16 leaf and wood physiological, morphological and anatomical traits in mature beech trees (Fagus sylvatica L.) at six sites located along a climatic gradient in the French Alps. At each site, we studied pure beech and mixed stands with silver fir (Abies alba Mill.) or downy oak (Quercus pubescens Willd.). We tested how functional traits differed between the two species mixtures (pure vs. mixed stands) within each site and along the climatic gradient. We found significant changes in many traits along the climatic gradient as conditions progressively got drier and warmer. Independent of the mixture, reduced leaf‐level CO2 assimilation, stomatal size and thicker leaf cuticles, consistent with a more conservative resource use strategy, were found. At the drier sites, higher foliar stable carbon isotopic composition (δ13C), thicker mesophyll tissues and lower specific leaf area (SLA) in pure stands suggest that beech had more acquisitive traits there compared to mixed stands. At the wetter sites, trees in beech‐silver fir mixtures had higher chlorophyll concentration, lower δ13C, larger xylem vessels and higher SLA, suggesting a more acquisitive resource use strategy in mixed stands than in pure stands. Our work revealed that species interactions are significant modulators of functional traits, and that they can be just as important drivers of intraspecific trait variation as climatic conditions. We show that downy oak mixtures lead to an adaptive drought response by common beech in dry environments. In contrast, in milder climates, interactions with silver fir seem to increase beech resource acquisition and productivity. These findings highlight a strong context dependency and imply that incorporating local interspecific interactions in research on climate impacts could improve our understanding and predictions of forest dynamics. A free Plain Language Summary can be found within the Supporting Information of this article.