Abstract: Significant decrease in precipitation up to 15-20% has been observed in the Mediterranean area in the last two decades as a consequence of climate change. To simulate an analogous scenario, the precipitation regime was altered in replicated experimental plots in a Mediterranean macchia dominated by Arbutus unedo L. species. Two different levels of soil water content (SWC) were obtained during the summer: a mean value of 7% was obtained in water-depleted (D) plots by a partial (-20%) rain exclusion treatment using rain gutters; while a mean value of 14% in SWC was obtained in watered (W) plots supplying water by a sprinkler net. The physiological and structural changes were investigated over the course of two consecutive years by measurement of water potential, gas exchange leaf carbon isotopes, leaf pigments and growth. Apart from short-term responses, mainly related to the elastic response of stomatal conductance to soil water, a more long-lasting and significant acclimation to water availability was observed as a result of the increase in hydraulic resistance in the soil-plant continuum, which persisted even after the return to full water availability during the fall and winter. This response involved the permanent down-regulation of stomatal conductance and photosynthesis, accumulation of photo-protective pigments, as well as a reduction in shoot growth, leaf area index and an increase in shoot-bearing flowers in D plots. This acclimation response prevented the onset of any run-away damage thereby reducing the forest vulnerability to drought. Furthermore, the imposed drought induced a slight increase or no change in intrinsic water-use efficiency (WUEint), as a result of the parallel increase in stomatal and non-stomatal limitations; conversely integrated WUE (i.e., estimated from leaf carbon isotopes) was not affected by drought.