Water relations are essential in plant–plant interactions, particularly in Mediterranean coastal sand dunes, owing to marked drought periods and the possibility of groundwater (GW) salinization. In this study, seasonal water use dynamics were explored in the interaction between a native–invasive species, Retama monosperma, and the endangered Thymus carnosus, in south-western Spain. The following variables were measured: xylem water isotopic composition to determine water sources, predawn and midday stem water potential and free leaf proline content as stress indicator. GW electrical conductivity and stable isotopes were also analysed to assess water table salinity. In late summer and spring, the warmest seasons, Thymus beneath Retama displayed significantly lower water potential and higher leaf proline content than isolated Thymus, whereas Retama showed the highest proline content in autumn and winter. Water sources showed different patterns depending on the Thymus situation: Isolated ones always matched the brackish GW, as well as Retama plants, whereas Thymus beneath Retama switched among rainfall, soil and water table, showing a seasonal change in the water-harvesting strategy. Overall, competition for water sources between both species was discovered, which led to a shift in water use and water uptake strategies of understorey Thymus. The results also demonstrate the importance and potential use of species interaction studies in the development of threatened species management strategies. Copyright © 2013 John Wiley & Sons, Ltd.