Many studies have documented genetic differentiation of physiological ecotypes along environmental gradients in the temperate zone, but this topic has received little attention in tropical plants. We collected cuttings of Psychotria horizontalis (Rubiaceae) from Atlantic and Pacific coastal areas in central Panama, which differed twofold in annual rainfall, and grew them under common conditions in a screened, open-air growing house for 14 months. Plants from the wetter (Atlantic) region showed significantly higher stomatal conductance, but photosynthetic rates were similar in both groups, leading to higher water use efficiency in plants from the drier (Pacific) region. Responses of stomatal conductance to atmospheric humidity were similar in both groups. Anatomical studies show that plants from the wetter region had a higher mesophyll surface area per unit leaf area (A(mes)/A(leaf)) than plants from the drier region (17.2 versus 13.9), and also had a higher stomatal density (161.5 versus 98.0 mm(-2)) and fewer trichomes (2.0 versus 18.7 mm(-2)). The proportion of palisade cell surface area that was exposed to intercellular airspaces is higher in plants from the Pacific coast than from the Atlantic coast, such that the total palisade cell surface area exposed to the intercellular airspaces is similar in plants from the two regions (A(mes)/A(leaf) = 1.7). Paired plants transplanted into natural forest understory conditions showed considerable variability among sites, but plants from the drier region consistently had lower stomatal conductance than plants from the wetter region. After 20 months in the field, plant growth was similar regardless of plant origin, but plants of Pacific coast origin had longer roots and more (but smaller) leaves than plants of Atlantic coast origin. Stomatal density in field-grown plants was higher in plants of Atlantic (135.9 mm(-2)) than Pacific (90.1 mm(-2)) origin. An understanding of genetically based adaptations to local environmental conditions is important for predicting the consequences of climatic change and forest fragmentation.