It is argued that the inclusion of spatially heterogeneous environments in biodiversity reserves will be an effective means of encouraging ecosystem resilience and plant community conservation under climate change. However, the resilience and resistance of plant populations to global change, the specific life-history traits involved and the spatial scale at which environmentally driven demographic variation is expressed remains largely unknown for most plant groups. Here we address these questions by reporting an empirical investigation into the impacts of an unprecedented 3-year drought on the demography, population growth rates (λ) and biogeographical distribution of core populations of the perennial grassland species Austrostipa aristiglumis in semiarid Australia. We use life-history analysis and periodic matrix population models to specifically test the hypothesis that patch- and habitat-scale variation in vital life-history parameters result in spatial differences in the resilience and resistance of A. aristiglumis populations to extreme drought. We show that the development of critical soil water deficits during drought resulted in collapse of adult A. aristiglumis populations (λ≪1), rapid interhabitat phytosociological change and overall contraction towards mesic refugia where populations were both more resistant and resilient to perturbation. Population models, combined with climatic niche analysis, suggest that, even in core areas, a significant reduction in size and habitat range of A. aristiglumis populations is likely under climate change expected this century. Remarkably, however, we show that even minor topographic variation (0.2–3 m) can generate significant variation in demographic parameters that confer population-level resilience and resistance to drought. Our findings support the hypothesis that extreme climatic events have the capacity to induce rapid, landscape-level shifts in core plant populations, but that the protection of topographically heterogeneous environments, even at small spatial scales, may play a key role in conserving biodiversity under climate change in the coming century.