This study compared the physiological and molecular responses to drought and rehydration in three Medicago species: the model Medicago truncatula (cv. Jemalong A17) and two wild relatives, Medicago ciliaris and Medicago minima, collected from contrasting bioclimatic zones of northeastern Algeria. Plants were grown under controlled conditions and subjected to moderate (2/3 field capacity (FC)) and severe (1/3 FC) drought, followed by rewatering. Stomatal resistance, symbiotic nitrogen fixation and expression of five stress-responsive genes (MtNCED3, MtLb1, MtHD1, MtMYB111 and MtNAC969) were analysed in nodules by quantitative reverse transcription PCR (RT-qPCR). Drought increased stomatal resistance in all species, with distinct magnitudes and recovery dynamics: M. truncatula and M. ciliaris exhibited strong and reversible stomatal closure, whereas M. minima maintained high basal resistance with limited plasticity. Nitrogenase activity decreased in all species but recovered partially only in M. truncatula. The expression of MtNCED3 and MtLb1 paralleled these physiological patterns, indicating coordinated regulation of hormonal balance and nodule function under drought. The transcription factors MtHD1, MtMYB111 and MtNAC969 showed distinct expression trends among species, indicating divergent patterns of gene regulation in response to drought and rehydration. Collectively, these findings reveal three distinct drought-response patterns: dynamic and plastic regulation in M. truncatula, higher sensitivity with reduced recovery capacity in M. ciliaris and a constitutive conservative strategy in M. minima. By linking physiological responses with transcriptional regulation, this study provides new insights into drought adaptation mechanisms in annual Medicago species, with potential relevance for understanding legume responses under increasingly variable water availability in Mediterranean and semi-arid environments.