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Studies of facilitative interactions as drivers of plant richness along environmental gradients often assume the existence of an overarching stress gradient that equally affects the performance of all the species in a given community. However, co-existing species differ in their ecophysiological adaptations, and do not experience the same stress level under particular environmental conditions. Moreover, these studies assume a unimodal relationship between richness and biomass, which is not as general as previously thought. We ignored these assumptions to assess changes in plant -plant interactions and their effect on local species richness across environmental gradients in semi-arid areas of Spain and Australia. We aimed to understand the relative importance of direct (microhabitat amelioration) and indirect (changes in the competitive relationships among the understorey species: niche segregation, competitive exclusion or intransitivity) mechanisms that might underlie the effects of nurse plants on local species richness. By jointly studying these direct and indirect mechanisms using a unifying framework, we found that nurse plants (trees, shrubs and tussock grasses) increased local richness not only by expanding the niche of neighbouring species but also by increasing niche segregation among them, though the latter was not important in all cases. The outcome of the competition-facilitation continuum varied depending on the study area, likely because the different types of stress gradient considered. When driven by both rainfall and temperature, or rainfall alone, the community-wide importance of nurse plants remained constant (Spanish sites), or showed a unimodal relationship along the gradient (Australian sites). This study expands our understanding of the relative roles of plant “plant interactions and environmental conditions as drivers of local species richness in semi-arid environments. The results can also be used to refine predictions about the response of plant communities to environmental change, and to clarify the relative importance of biotic interactions as drivers of such responses.