Compensatory population dynamics among species stabilise aggregate community variables. Inter-specific competition is thought to be stabilising as it promotes asynchrony among populations. However, we know little about other inter-specific interactions, such as facilitation and granivory. Such interactions are also likely to influence population synchrony and community stability, especially in harsh environments where they are thought to have relatively strong effects in plant communities. We use a manipulative experiment to test the effects of granivores (harvester ants) and nurse plants (dwarf shrubs) on annual plant community dynamics in the Negev desert, Israel. We present evidence for weak and inconsistent effects of harvester ants on plant abundance and on population and community stability. By contrast, we show that annual communities under shrubs were more species rich, had higher plant density and were temporally less variable than communities in the inter-shrub matrix. Species richness and plant abundance were also more resistant to drought in the shrub under-storey compared with the inter-shrub matrix, although population dynamics in both patch types were synchronised. Hence, we show that inter-specific interactions other than competition affect community stability, and that hypothesised mechanisms linking compensatory dynamics and community stability may not operate to the same extent in arid plant communities.