Abstract: Diversity is positively correlated with water availability at global, continental and regional scales. With the objective of better understanding the mechanisms that drive these relationships. we investigated the degree to which variation in water availability affects the performance (recruitment, growth a rid survival) of juvenile trees. Precipitation was supplemented throughout two dry seasons in a seasonal moist forest in south-eastern Peru. Supplementing precipitation by 160 mm mo(-1), we increased soil moisture by 17%. To generate seedling communities or known species composition, we sowed 3840 seeds of 12 species. We monitored the fates of the 554 seedlings recruited from the sown seeds. as well as 1856 older non-sown seedlings (10 cm <= height < 50 cm), and 2353 saplings (> 1 m tall). Watering significantly enhanced young seedling growth and survival, increasing stern density and diversity. Watering diminished the recruitment of species associated with upland forests, but increased the survival of both upland- and lowland-associated species. Though supplemental watering increased the growth of older seedlings. their density and diversity were unaffected. Sapling performance was insensitive to watering. We infer that variation in dry-season water availability may affect seedling community structure by differentially affecting recruitment and increasing overall survival. These results suggest that differential seedling recruitment and survival may contribute to the observed relationships between water availability, habitat associations and patterns of tree species richness.