The forests of south-central Chile are facing a drying climate and a megadrought that started in 2010. This study addressed the physiological responses of five Nothofagus obliqua stands across the Mediterranean-Temperate gradient (35.9 ° -40.3° S) using carbon isotope discrimination (Δ13 C) and intrinsic water use efficiency (iWUE) in tree rings during 1967-2017. Moreover, δ18O was evaluated in the northernmost site to better understand the effects of the megadrought in this drier location. These forests have become more efficient in their use of water. However, trees from the densest stand are discriminating more against 13C, probably due to reduced photosynthetic rates associated with increasing competition. The strongest associations between climate and Δ13C were found in the northernmost stand, suggesting that warmer and drier conditions could have reduced 13C discrimination. Tree growth in this site has not decreased, and δ18O was negatively related to annual rainfall. However, a shift in this relationship was found since 2007, when both precipitation and δ18O decreased, while correlations between δ18O and growth increased. This implies that tree growth and δ18O are coupled in recent years, but precipitation is not the cause, suggesting that trees probably changed their water source to deeper and more depleted pools. Our research demonstrates that forests are not reducing their growth in central Chile, mainly due to a shift towards the use of deeper water sources. Despite a common climate trend across the gradient, there is a non-uniform response of N. obliqua forests to climate drying, being their response site specific. Keywords: Tree rings, stable isotopes, tree physiology, climate gradient, megadrought, climate change.