Aim: Comparative responses of Nothofagus species to water deficits were studied to determine whether rainfall regimes could limit the latitudinal ranges of tropical and temperate forest species. Location: The study species are native to New Guinea, New Caledonia, Australia, New Zealand, Chile and Argentina. Methods: Seedlings of Nothofagus species from a broad latitudinal range were grown in a common environment. Changes in conductance, relative water content and water potential were measured in detached shoots, and together with measurements of tissue injury and biomass allocation, were compared between tropical and temperate species. Results: Differences in responses to water deficits between tropical and temperate species appear to reflect differences in climate regimes. In particular, species native to ever-wet rainfall regimes in New Guinea, where water deficits are generally likely to be short-lived, were effective at conserving water by reduced stomatal conductance. In contrast, high-latitude evergreen species on average showed greater development of traits that should enhance water uptake. This was particularly evident in Nothofagus cunninghamii from southern Australia, which developed low water potentials at moderate levels of tissue water deficit and higher root:leaf biomass than tropical species, potentially allowing carbon assimilation to be maximized during warmer, but drier, summer months. However, water relations varied among high-latitude species. In particular, deciduous species on average showed higher rates of conductance, even during moderate levels of tissue water deficit, than evergreen species. Main conclusions: The tropical species appear to conserve water during periods of water deficit (relative to temperate species), which is unlikely to have substantial opportunity costs for growth in ever-wet climates. However, spread of tropical species to higher latitudes may be limited by water conservation strategies that limit carbon gain in climates in which temperature seasonality is often paired with drier summers. Evergreen species from high latitudes, such as N. cunninghamii, commonly showed traits that should increase water uptake. However, this strategy, while probably maximizing growth in temperate climates with cool winters and drier summers, must limit competitiveness at lower latitudes in summer-wet climates. We conclude that responses to water regimes may make a significant contribution to the latitudinal limits of some evergreen rain forest species.