Nothofagus cunninghamii (Hook.) Oerst. and Atherosperma moschatum Labill. co-occur in cool-temperate rainforest across the wetter parts of Tasmania and Victoria, Australia, but A. moschatum extends to drier areas than N. cunninghamii. Possible reasons include differential tolerance of drought and fire or dispersal capacity. Here, we compare these species in their responses to water deficits. Differences in seedling survival, leaf tissue damage, shoot water relations, stomatal sensitivity,

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... tion of biomass and the long-term water-use efficiency of each species in response to water stress were investigated. N. cunninghamii showed traits typical of a high-water-use species, such as high stomatal conductance, a strategy that is not surprising in a rainforest species. However, it also displayed an exceptional ability to draw water from the soil and longer seedling roots, allowing replacement of water lost, at least in the short term. A. moschatum showed a more conservative water-use strategy, surviving greater internal dehydration with less damage, and displaying greater stomatal sensitivity to drought and long-term water-use efficiency in trees. The apparently superior long-term drought resistance of A. moschatum may in part explain its more common occurrence in drier regions than N. cunninghamii, at least in Tasmania, while the capacity of N. cunninghamii to survive short but severe periods of water stress correlates well with its higher position in the canopy and greater exposure to sunlight and desiccating winds. However, there is little evidence to suggest that the absence of N. cunninghamii from the rainforests of eastern Victoria is due to drought. We also suggest that the water-use strategy of N. cunninghamii may relate not just to surviving water deficits, but to maximising annual carbon gain in a temperate climate that is, on average, driest during the warmest time of the year.