Drought-induced groundwater decline and warming associated with climate change are primary threats to dryland riparian woodlands. We used the extreme 2012–2019 drought in southern California as a natural experiment to assess how differences in water-use strategies and groundwater dependence may influence the drought susceptibility of dryland riparian tree species with overlapping distributions. We analyzed tree-ring stable carbon and oxygen isotopes collected from two cottonwood species (Populus trichocarpa and P. fremontii) along the semi-arid Santa Clara River. We also modeled tree source water δ¹⁸O composition to compare with observed source water δ¹⁸O within the floodplain to infer patterns of groundwater reliance. Our results suggest that both species functioned as facultative phreatophytes that used shallow soil moisture when available but ultimately relied on groundwater to maintain physiological function during drought. We also observed apparent species differences in water-use strategies and groundwater dependence related to their regional distributions. P. fremontii was constrained to more arid river segments and ostensibly used a greater proportion of groundwater to satisfy higher evaporative demand. P. fremontii maintained ∆¹³C at pre-drought levels up until the peak of the drought, when trees experienced a precipitous decline in ∆¹³C. This response pattern suggests that trees prioritized maintaining photosynthetic processes over hydraulic safety, until a critical point. In contrast, P. trichocarpa showed a more gradual and sustained reduction in ∆¹³C, indicating that drought conditions induced stomatal closure and higher water use efficiency. This strategy may confer drought avoidance for P. trichocarpa while increasing its susceptibility to anticipated climate warming.