The intensification of aridity due to anthropogenic climate change in the southwestern U.S. is likely to have a large impact on the growth and survival of plant species that may already be vulnerable to water stress. To make accurate predictions of plant responses to climate change, it is essential to determine the long‐term dynamics of plant species associated with past climate conditions. Here we show how the plant species and functional types across a wide range of environmental conditions in Colorado Plateau national parks have changed with climate variability over the last twenty years. During this time, regional mean annual temperature increased by 0.18°C per year from 1989–1995, 0.06°C per year from 1995–2003, declined by 0.14°C from 2003–2008, and there was high interannual variability in precipitation. Non‐metric multidimensional scaling of plant species at long‐term monitoring sites indicated five distinct plant communities. In many of the communities, canopy cover of perennial plants was sensitive to mean annual temperature occurring in the previous year, whereas canopy cover of annual plants responded to cool season precipitation. In the perennial grasslands, there was an overall decline of C₃ perennial grasses, no change of C₄ perennial grasses, and an increase of shrubs with increasing temperature. In the shrublands, shrubs generally showed no change or slightly increased with increasing temperature. However, certain shrub species declined where soil and physical characteristics of a site limited water availability. In the higher elevation woodlands, Juniperus osteosperma and shrub canopy cover increased with increasing temperature, while Pinus edulis at the highest elevation sites was unresponsive to interannual temperature variability. These results from well‐protected national parks highlight the importance of temperature to plant responses in a water‐limited region and suggest that projected increases in aridity are likely to promote grass loss and shrub expansion on the Colorado Plateau.