Drought stress is an important consideration for wildlife in arid and semi‐arid regions under climate change. Drought can impact plant and animal populations directly, through effects on their physiology, as well as indirectly through effects on vegetation productivity and resource availability, and by creating conditions conducive to secondary disturbance, such as wildfire. We implemented a novel approach to understanding community‐level demographic responses of birds and their habitats to these stressors in the context of climate change at 14 study sites in the Four Corners region of the southwestern United States. A large wildfire affecting three of the sites provided a natural experiment for also examining fire effects on vegetation and the bird community. We assessed: 1) trends in drought and end‐of‐century (2071‐2100) predicted average drought conditions under mid‐range and high greenhouse gas concentration trajectory scenarios; 2) effects of drought and fire on habitat (vegetation greenness); and 3) effects of drought and fire on community‐level avian productivity and adult apparent survival rates. Drought has increased and is expected to increase further at our study sites under climate change. Under spring drought conditions, vegetation greenness and avian productivity declined, while summer drought appeared to negatively affect adult apparent survival rates. Response to fire was mixed; in the year of the fire, avian productivity declined, but was higher than normal for several years post‐fire. Our results highlight important links between environmental stressors and avian vital rates that will likely affect population trajectories in this region under climate change. We suggest that the use and continued development of community‐level demographic models will provide useful tool for leveraging sparse species‐level data to provide multi‐species inferences and inform conservation.