The characterisation of ecological strategies to predict drought response is still lacking for Caribbean dry forest seedlings. This study documents growth characteristics and tolerance to drought via xylem hydraulic and leaf cell properties of three dominant native species of the Caribbean dry forest. Twenty morphological and physiological traits were assessed in Citharexylum spinosum, Guaiacum officinale and Guapira fragrans in greenhouse conditions. The seedlings displayed contrasting growth rates, which were positively correlated with the capacity to quickly develop a large leaf area and root fraction. The three species had a similar xylem tolerance to embolism (P 50 : −4 MPa) but differed in leaf cell tolerance to dehydration, which was negatively correlated with RGR (R 2 > 0.87). The slowest-growing, G. officinale, had high leaf tolerance to cell dehydration due to low Ψ TLP and πo, but displayed a narrow hydraulic safety margin. The leaves of the fast-growing C. spinosum were sensitive to leaf dehydration but exhibited a surprisingly wide stem hydraulic safety margin. G. fragrans had intermediate traits. Our results showed that dry forest seedling growth in similar environments can exhibit distinct carbon growth strategies as well as contrasting water-use strategies, primarily as they relate to drought resistance, due to variation in root development and leaf cell resistance to dehydration. Our study thus provides an approach to estimate species performance under drought conditions.