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Abstract Plant traits can be helpful for understanding grassland ecosystem responses to climate extremes, such as severe drought. However, intercontinental comparisons of how drought affects plant functional traits and ecosystem functioning are rare. The Extreme Drought in Grasslands experiment (EDGE) was established across the major grassland types in East Asia and North America (six sites on each continent) to measure variability in grassland ecosystem sensitivity to extreme, prolonged drought. At all sites, we quantified community‐weighted mean functional composition and functional diversity of two leaf economic traits, specific leaf area and leaf nitrogen content, in response to drought. We found that experimental drought significantly increased community‐weighted means of specific leaf area and leaf nitrogen content at all North American sites and at the wetter East Asian sites, but drought decreased community‐weighted means of these traits at moderate to dry East Asian sites. Drought significantly decreased functional richness but increased functional evenness and dispersion at most East Asian and North American sites. Ecosystem drought sensitivity (percentage reduction in aboveground net primary productivity) positively correlated with community‐weighted means of specific leaf area and leaf nitrogen content and negatively correlated with functional diversity (i.e., richness) on an intercontinental scale, but results differed within regions. These findings highlight both broad generalities but also unique responses to drought of community‐weighted trait means as well as their functional diversity across grassland ecosystems.