Alpine plants in Australia are increasingly exposed to more frequent drought and heatwaves, with significant consequences for physiological stress responses. Acclimation is a critical feature that allows plants to improve tolerance to environmental extremes through directly altering their physiology or morphology. Yet it is unclear how plant performance and tolerance is affected when heat and drought stress co-occur, and whether prior exposure affects responses to subsequent climate extremes. We grew a common alpine grass species under high or low watering treatments for three weeks before exposure to either none, one, or two heat stress events. We determined high and low thermal tolerance (LT 50 , mean temperature causing 50% irreversible damage to photosystem II) and growth. Physiological adjustments to low watering, including more negative water potentials and reduced growth, were also characterised by improved tolerance to extreme high and low temperatures. Shifts to higher heat tolerance was also evident with increasing exposure to heat stress events. These effects were mostly short-term, however, as prior exposure to heat and/or water stress had little to no effect on growth and thermal tolerance following the six week recovery period. We conclude that acclimation to increasingly frequent soil moisture deficits during summer should provide enhanced capacity to tolerate temperature extremes. As leaf temperatures increase with water stress, the risk of exceeding thermal tolerance limits may increase with a drying climate, and physiological acclimation may not adequately mitigate the effects of chronic water stress as would occur under a long-term drought.