In order to understand the impact of drought and intrinsic water-use efficiency (iWUE) on tree growth, we evaluated the relative importance of direct and indirect effects of water availability on secondary growth and xylem anatomy of Juniperus thurifera, a Mediterranean anisohydric conifer. Dendrochronological techniques, quantitative xylem anatomy, and (13)C/(12)C isotopic ratio were combined to develop standardized chronologies for iWUE, BAI (basal area increment), and anatomical variables on a 40-year-long annually resolved series for 20 trees. We tested the relationship between iWUE and secondary growth at short-term (annual) and long-term (decadal) temporal scales to evaluate whether gains in iWUE may lead to increases in secondary growth. We obtained a positive long-term correlation between iWUE and BAI, simultaneously with a negative short-term correlation between them. Furthermore, BAI and iWUE were correlated with anatomical traits related to carbon sink or storage (tracheid wall thickness and ray parenchyma amount), but no significant correlation with conductive traits (tracheid lumen) was found. Water availability during the growing season significantly modulated tree growth at the xylem level, where growth rates and wood anatomical traits were affected by June precipitation. Our results are consistent with a drought-induced limitation of tree growth response to rising CO2, despite the trend of rising iWUE being maintained. We also remark the usefulness of exploring this relationship at different temporal scales to fully understand the actual links between iWUE and secondary growth dynamics.