Dryland ecosystems represent >40 % of the terrestrial landscape and support over two billion people; consequently, it is vital to understand how drylands will respond to climatic change. However, while arid and semiarid ecosystems commonly experience extremely hot and dry conditions, our understanding of how further temperature increases or altered precipitation will affect dryland plant communities remains poor. To address this question, we assessed plant physiology and growth at a long-term (7-year) climate experiment on the Colorado Plateau, USA, where the community is a mix of shallow-rooted C3 and C4 grasses and deep-rooted C4 shrubs. The experiment maintained elevated-temperature treatments (+2 or +4 °C) in combination with altered summer monsoonal precipitation (+small frequent precipitation events or +large infrequent events). Increased temperature negatively affected photosynthesis and growth of the C3 and C4 grasses, but effects varied in their timing: +4 °C treatments negatively affected the C3 grass early in the growing season of both years, while the negative effects of temperature on the C4 grass were seen in the +2 and +4 °C treatments, but only during the late growing season of the drier year. Increased summer precipitation did not affect photosynthesis or biomass for any species, either in the year the precipitation was applied or the following year. Although previous research suggests dryland plants, and C4 grasses in particular, may respond positively to elevated temperature, our findings from a cool desert show marked declines in C3 and C4 photosynthesis and growth, with temperature effects dependent on the degree of warming and growing-season precipitation.