Amazonian droughts are increasing in frequency and severity. However, little is known about how this may influence species-specific vulnerability to drought across different ecosystem types. We measured 16 functional traits for 16 congeneric species from six families and eight genera restricted to floodplain, swamp, white-sand or plateau forests of Central Amazonia. We investigated whether habitat distributions can be explained by species hydraulic strategies, and if habitat specialists differ in their vulnerability to embolism that would make water transport difficult during drought periods. We found strong functional differences among species. Nonflooded species had higher wood specific gravity and lower stomatal density, whereas flooded species had wider vessels, and higher leaf and xylem hydraulic conductivity. The P50 values (water potential at 50% loss of hydraulic conductivity) of nonflooded species were significantly more negative than flooded species. However, we found no differences in hydraulic safety margin among species, suggesting that all trees may be equally likely to experience hydraulic failure during severe droughts. Water availability imposes a strong selection leading to differentiation of plant hydraulic strategies among species and may underlie patterns of adaptive radiation in many tropical tree genera. Our results have important implications for modeling species distribution and resilience under future climate scenarios.