Partitioning of water resources amongst plant species within a single climate envelope is possible if the species differ in key hydraulic traits. We examined 11 bivariate trait relationships across nine woody species found in the Ti-Tree basin of central Australia. We found that species with limited access to soil moisture, evidenced by low pre-dawn leaf water potential, displayed anisohydric behaviour (e.g. large seasonal fluctuations in minimum leaf water potential), had greater sapwood density and lower osmotic potential at full turgor. Osmotic potential at full turgor was positively correlated with the leaf water potential at turgor loss, which was, in turn, positively correlated with the water potential at incipient stomatal closure. We also observed divergent behaviour in two species of Mulga, a complex of closely related Acacia species which range from tall shrubs to low trees and dominate large areas of arid and semiarid Australia. These Mulga species had much lower minimum leaf water potentials and lower specific leaf area compared with the other seven species. Finally, one species, Hakea macrocarpa A.Cunn ex.R.Br., had traits that may allow it to tolerate seasonal dryness (through possession of small specific leaf area and cavitation resistant xylem) despite exhibiting cellular water relations that were similar to groundwater-dependent species. We conclude that traits related to water transport and leaf water status differ across species that experience differences in soil water availability and that this enables a diversity of species to exist in this low rainfall environment.