Terrestrial carbon exchange is a key process of the global carbon cycle consisting of a delicate balance between photosynthetic carbon uptake and respiratory release. We have, however, a limited understanding how long-term decreases in precipitation induced by climate change affect the boundaries and mechanisms of photosynthesis and respiration. We examined the seasonality of photosynthetic and respiratory traits and evaluated the adaptive mechanism of the foliar carbon balance of Quercus ilex L. experiencing a long-term rainfall-exclusion experiment. Day respiration (R d) but not night respiration (R n) was generally higher in the drought treatment leading to an increased R d/R n ratio. The limitation of mesophyll conductance (g m) on photosynthesis was generally stronger than stomatal limitation (g s) in the drought treatment, reflected in a lower g m/g s ratio. The peak photosynthetic activity in the drought treatment occurred in an atypical favourable summer in parallel with lower R d/R n and higher g m/g s ratios. The plant carbon balance was thus strongly improved through: (i) higher photosynthetic rates induced by g m; and (ii) decreased carbon losses mediated by R d. Interestingly, photosynthetic potentials (V c,max, J max, and TPU) were not affected by the drought treatment, suggesting a dampening effect on the biochemical level in the long term. In summary, the trees experiencing a 14-year-long drought treatment adapted through higher plasticity in photosynthetic and respiratory traits, so that eventually the atypical favourable growth period was exploited more efficiently.