Drought impairs tree growth in the inner-Alpine valleys of Central Europe. We investigated species-specific responses to contrasting water supply, with Scots pine (Pinus sylvestris L.), threatened by drought-induced mortality, and pubescent oak (Quercus pubescens Willd.), showing no connection between drought events and mortality. The two co-occurring tree species were compared, growing either along an open water channel or at a site with naturally dry conditions. In addition, the growth response of Scots pine to a draining of a water channel was studied. We analysed the radial increment for the last 100 years and wood anatomical parameters for the last 45 years. Drought reduced the conduit area of pubescent oak, but increased the radial lumen diameter of the conduits in Scots pine. Both species decreased their radial increment under drought. In Scots pine, radial increment was generally more dependent on water availability than that in pubescent oak. Irrigated trees responded less negatively to high temperature as seen in the increase in the conduit area in pubescent oak and the removal of the limitation of cell division by high temperatures. After irrigation stopped, tree-ring width for Scots pine decreased within 1-year delay, whereas lumen diameter and cell-wall thickness responded with a 4-year delay. Scots pine seemed to optimize the carbon-per-conduit-costs under drought by increasing conduits diameter while decreasing cell numbers. This strategy might lead to a complete loss of tree rings under severe drought and thus to an impairment of water transport. In contrast, in pubescent oak tree-ring width is less affected by summer drought because parts of the earlywood are built in early spring. Thus, pubescent oak might have gradual advantages over pine in today's climate of the inner-Alpine valley.