Artificial mixed plantations on the Chinese Loess Plateau have played a pivotal role in enhancing ecosystem stability and strengthening ecological service functions. However, under the global climate change, the frequent and intense dry-wet transitions have increasingly complicated the forest-water interactions. The water use strategy and water relations of coexisting tree species in mixed plantations remain unclear, seriously constraining the efficient and sustainable management of plantations. In this study, we conducted a full growing season investigation, characterized by distinct dry and wet seasons, to examine the water use characteristics in tree representative plantations types: mixed plantation of Hippophae rhamnoides and Platycladus orientalis (HrPo), pure H. rhamnoides plantation (Hr) and pure P. orientalis plantation (Po). We measured the isotopic compositions of precipitation, xylem and soil water (delta D and delta O-18) and leaf delta C-13, leaf water potential. We then used the IsoSource and Levins niche index models to quantify hydrological niche. The results showed that during drought, compared to their pure plantations, HrPo(Po) utilized more middle-layer water, whereas HrPo(Hr) increased its deep-layer water. While under wet conditions, all stands shifted to predominant (>80%) shallow-middle source (particularly the shallow). Leaf delta C-13 values were significantly higher in the mixed plantation during drought, reflecting enhanced leaf-level water-use efficiency (WUEi) (P < 0.05). The two species exhibited contrasting hydraulic strategies: P. orientalis displayed isohydric regulation (sigma < 1), while H. rhamnoides showed anisohydric regulation (sigma > 1). Crucially, these complementary adjustments manifested at the niche level as an expansion in width for HrPo(Po) and a concurrent, strategic narrowing for HrPo(Hr), collectively resulting in reduced niche overlap during the dry season. In summary, these results demonstrate that HrPo enhances drought resilience through facilitating vertical niche partitioning and complementary water-use strategies, which transform interspecific competition into a synergistic relationship that boosts overall water use efficiency. These insights offer important implications for the restoration and management of water-limited ecosystems.