Temporal asynchrony among species helps diversity to stabilize ecosystem functioning, but identifying the mechanisms that determine synchrony remains a challenge. Here, we refine and test theory showing that synchrony depends on three factors: species responses to environmental variation, interspecific interactions, and demographic stochasticity. We then conduct simulation experiments with empirical population models to quantify the relative influence of these factors on the synchrony of dominant species in five semiarid grasslands. We found that the average synchrony of per capita growth rates, which can range from 0 (perfect asynchrony) to 1 (perfect synchrony), was higher when environmental variation was present (0.62) rather than absent (0.43). Removing interspecific interactions and demographic stochasticity had small effects on synchrony. For the dominant species in these plant communities, where species interactions and demographic stochasticity have little influence, synchrony reflects the covariance in species responses to the environment.