Population persistence is strongly determined by climatic variability. Changes in the patterns of climatic events linked to global warming may alter population dynamics, but their effects may be strongly modulated by biotic interactions. Plant populations interact with each other in such a way that responses to climate of a single population may impact the dynamics of the whole community. In this study, we assess how climate variability affects persistence and coexistence of two dominant plant species in a semiarid shrub community on gypsum soils. We use 9 years of demographic data to parameterize demographic models and to simulate population dynamics under different climatic and ecological scenarios. We observe that populations of both coexisting species may respond to common climatic fluctuations both similarly and in idiosyncratic ways, depending on the yearly combination of climatic factors. Biotic interactions (both within and among species) modulate some of their vital rates, but their effects on population dynamics highly depend on climatic fluctuations. Our results indicate that increased levels of climatic variability may alter interspecific relationships. These alterations might potentially affect species coexistence, disrupting competitive hierarchies and ultimately leading to abrupt changes in community composition.