Environmental fluctuations can generate asynchronous species' fluctuations and community stability, due to compensatory dynamics of species with different environmental tolerances. We tested this hypothesis in intertidal hard-bottom communities of north-central Chile, where a persistent upwelling centre maintains a mosaic in sea surface temperatures (SST) over 10s of kilometres along the shore. Coastal upwelling implies colder and temporally more stable SST relative to downstream sites. Uni- and multivariate analyses of multiyear timeseries of SST and species abundances showed more asynchronous fluctuations and higher stability in sites characterised by warmer and more variable SST. Nevertheless, these effects were weakened after including data obtained in sites affected by less persistent upwelling centres. Further, dominant species were more stable in sites exposed to high SST variability. The strength of other processes that can influence community stability, chiefly statistical averaging and overyielding, did not vary significantly between SST regimes. Our results provide observational evidence supporting the idea that exogenously driven compensatory dynamics and the stabilising effects of dominant species can determine the stability of ecosystems facing environmental fluctuations.