Background and aims <p>The abundance and distribution range of crassulacean acid metabolism (CAM) plants have recently increased in arid and semi-arid regions, yet the underlying water utilization strategies and adaptive mechanisms remain unclear.</p> Methods <p>Through greenhouse experiments we investigated the morphology, photosynthetic traits, and biomass allocation of CAM species <i>Orostachys fimbriata</i> under divergent precipitation and competition patterns.</p> Results <p>The results showed that: (1) Plant height, CO₂ assimilation rate, aboveground and belowground biomass generally declined in CAM plants as precipitation decreased, but the root-to-shoot biomass (R:S) ratio increased. The total biomass of CAM plant decreased by 39.3% in mixture under 50% reduced precipitation, whereas the declines in C₃ and C₄ grasses were 84.9% and 55.1%, respectively. (2) In comparison to monoculture, CAM plants in mixtures experienced intense competition from grasses under well-watered conditions, resulting in lower height, CO₂ assimilation rate, biomass and higher R:S ratio. Conversely, grasses declined under 25% and 50% reduced precipitation, indirectly favored coexisting CAM plant growth, with no significant differences observed between CAM plants in monoculture and mixtures. (3) To cope with interspecific competition and water stress, CAM plants, by storing water, reduce height and aboveground biomass while increasing the R:S ratio.</p> Conclusion <p>CAM plants were less competitively suppressed under drought, primarily when competing only with C₃ plants. Given the predicted expansion of arid regions under future climate conditions, CAM plant expansion potential may intensify. This study provides new insights into the dynamics and community succession mechanisms of CAM vegetation in drylands under global change.</p>