Increasing intensity and frequency of climate extremes under climate change are expected to affect rainfall-constrained ecosystems, particularly grassland ecosystems in arid and semi-arid zones. However, our understanding of the effects of precipitation extremes (extreme drought or wetness) on grassland productivity, especially under naturally occurring conditions, remains limited. Here, we assembled a dataset of aboveground net primary productivity (ANPP) measurements from long-term (26–54 years) observational studies conducted in 13 grasslands worldwide to investigate the direct and legacy responses of grassland ANPP to naturally occurring precipitation extremes. We further examined changes in plant community structure (species richness, life history, growth form and photosynthetic pathway) before, during and after precipitation extremes. We found that extreme drought decreased ANPP by an average of 40%, while extreme wetness had a neutral effect on ANPP. The direct effects of both extreme drought and wetness on ANPP were aridity-dependent, with grassland vulnerability increasing with site aridity. However, we did not detect widespread legacy effects of extreme drought or wetness on ANPP. This is mainly attributable to reorganized plant community structure, which favored rapid recovery of community biomass. The aridity-dependent response of ANPP to precipitation extremes demonstrates the ambient climate-dependent resistance of grasslands to these events. Moreover, the minimal legacy effects of precipitation extremes on ANPP highlight the strong resilience of grasslands. These findings underscore the importance of integrating extreme climate conditions into forecasts of future grassland productivity and stability in a changing climate.