This study was undertaken in a watershed at a dry Spanish Mediterranean location. The effects of the north-facing and south-facing aspects on atmospheric parameters, soil water contents (SWCs) and plant water balances were assessed during 18 months including two dry seasons and one wet season. The species studied were the evergreen sclerophyll Quercus suber and the semi-deciduous shrubs Cistus albidus, Cistus monspeliensis and Lavandula stoechas. Atmospheric parameters were similar in both exposures, but water content of the 30-cm uppermost soil layers was higher under canopy in the south-facing slope during the wet season. Water balances of both slopes were different, and this was related to the lower shrub abundance and the vegetation patchiness observed in the south-facing slope. Autumn plant recovery was faster in the north-facing hillslope and occurred first in shrubs. During the whole study, Quercus suber displayed a hydrostable strategy maintaining an optimum water balance in both hillslopes. This was not the case of shrubs that avoided drought using a phenological adjustment and were more affected by aspect. Differences between tree and shrub water economies relied mainly on their respective root systems. The faster recovery of shrubs after the first autumn rainfalls allows them to avoid competition with other functional groups for water and nutrients during some days. Leaf-drying curves distinguished the functional behaviour of the tree and the shrubs because stomatal closure occurred at higher relative water content in the former. The coexistence of both functional strategies ensures an efficient use of water and nutritional resources.