Climate models predict widespread shifts in precipitation patterns and increases in the frequency of extreme events such as droughts, but consequences for key processes in affected ecosystems remains poorly understood. A 2-year manipulative experiment used a series of stream mesocosms to test the effect of recurrent drought disturbance on the composition and secondary production of macroinvertebrate consumer assemblages and functional groups. On average, secondary production in drought-disturbed communities (mean 4.5 g m−2 yr−1) was less than half of that that in controls (mean 10.4 g m−2 yr−1). The effects of the drought differed among functional feeding groups, with substantial declines for detritivore shredders (by 69%) and engulfing predators (by 94%). Contrasting responses were evident among taxa within most functional feeding groups, ranging from extirpation to irruptions in the case of several small midge larvae, but production of most species was suppressed. Taxon-specific responses were related to body mass and voltinism. The ratio of production to biomass (community P/B) increased under drought, reflecting a shift in production from large long-lived taxa to smaller taxa with faster life cycles. This research provides some of the first experimental evidence of the profound effects that droughts can have on both the structure and functioning of aquatic ecosystems.