Predictions of ecological response to climate change are based largely on direct climatic effects on species. We show that, in a California grassland, species interactions strongly influence responses to changing climate, overturning direct climatic effects within 5 years. We manipulated the seasonality and intensity of rainfall over large, replicate plots in accordance with projections of leading climate models and examined responses across several trophic levels. Changes in seasonal water availability had pronounced effects on individual species, but as precipitation regimes were sustained across years, feedbacks and species interactions overrode autecological responses to water and reversed community trajectories. Conditions that sharply increased production and diversity through 2 years caused simplification of the food web and deep reductions in consumer abundance after 5 years. Changes in these natural grassland communities suggest a prominent role for species interactions in ecosystem response to climate change.