Partial leaf shedding induced by hydraulic failure under prolonged drought can prevent excess water consumption, resulting in delayed recovery of carbon productivity following rainfall. To understand the manner of water use of invasive species in oceanic island forests under a fluctuating water regime, leaf shedding, multiple physiological traits, and the progress of embolism in the stem xylem under repeated drought-irrigation cycles were examined in the potted saplings of an invasive species, Bischofia javanica Blume, and three endemic native species, Schima mertensiana (Sieb. Et Zucc,) Koitz., Hibiscus glaber Matsum, and Distylium lepidotum Nakai, from the Bonin Islands, Japan. The progress of xylem embolism was observed by cryo-scanning electron microscopy. The samples exhibited different processes of water saving and drought tolerance based on the different combinations of partial leaf shedding involved in embolized conduits following repeated de-rehydration. Predawn leaf water potential largely decreased with each successive drought-irrigation cycle for all tree species, except for B. javanica. B. javanica shed leaves conspicuously under drought and showed responsive stomatal conductance to VPD, which contributed to recover leaf gas exchange in the remaining leaves, following a restored water supply. In contrast, native tree species did not completely recover photosynthetic rates during the repeated drought-irrigation cycles. H. glaber and D. lepidotum preserved water in vessels and adjusted leaf osmotic rates but did not actively shed leaves. S. mertensiana exhibited partial leaf shedding during the first cycle with an osmotic adjustment, but they showed less responsive stomatal conductance to VPD. Our data indicate that invasive B. javanica saplings can effectively use water supplied suddenly under drought conditions. We predict that fluctuating precipitation in the future may change tree distributions even in mesic or moist sites in the Bonin Islands.