Plant dehydration tolerance confers drought survival in grasses, but the mortality thresholds according to soil water content (SWC), vapour pressure deficit (VPD) and plant-plant interactions are little explored. We compared the dehydration dynamics of leaf meristems, which are the key surviving organs, plant mortality, and recovery of Mediterranean and temperate populations of two perennial grass species, Dactylis glomerata and Festuca arundinacea, grown in monocultures and mixtures under a low-VPD (1.5 kPa) versus a high-VPD drought (2.2 kPa). The lethal drought index (LD 50), that is, SWC associated with 50% plant mortality, ranged from 2.87% (ψs = −1.68 MPa) to 2.19% (ψs = −4.47 MPa) and reached the lowest values under the low-VPD drought. Populations of D. glomerata were more dehydration-tolerant (lower LD 50), survived and recovered better than F. arundinacea populations. Plant-plant interactions modified dehydration tolerance and improved post-drought recovery in mixtures compared with monocultures. Water content as low as 20.7%-36.1% in leaf meristems allowed 50% of plants to survive. We conclude that meristem dehydration causes plant mortality and that drought acclimation can increase dehydration tolerance. Genetic diversity, acclimation and plant-plant interactions are essential sources of dehydration tolerance variability to consider when predicting drought-induced mortality.