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A seasonal period of water deficit characterizes tropical dry forests (TDFs). There, sympatric tree species exhibit a diversity of growth rates, functional traits, and responses to drought, suggesting that each species may possess different strategies to grow under different conditions of water availability. The evaluation of the long-term growth responses to changes in the soil water balance should provide an understanding of how and when coexisting tree species respond to water deficit in TDFs. Furthermore, such differential growth responses may be linked to functional traits related to water storage and conductance. We used dendrochronology and climate data to retrospectively assess how the radial growth of seven coexisting deciduous tree species responded to the seasonal soil water balance in a Bolivian TDF. Linear mixed-effects models were used to quantify the relationships between basal area increment and seasonal water balance. We related these relationships with wood density and sapwood production to assess if they affect the growth responses to climate. The growth of all species responded positively to water balance during the wet season, but such responses differed among species as a function of their wood density. For instance, species with a strong growth response to water availability averaged a low wood density which may facilitate the storage of water in the stem. By contrast, species with very dense wood were those whose growth was less sensitive to water availability. Coexisting tree species thus show differential growth responses to changes in soil water balance during the wet season. Our findings also provide a link between wood density, a trait related to the ability of trees to store water in the stem, and wood formation in response to water availability. © 2013 Mendivelso et al., Funding: This project was funded by BBVA Foundation project “Análisis retrospectivos mediante dendrocronología para profundizar en la ecología y mejorar la gestión de los bosques tropicales secos (Dentropicas)” and AECID project “Regeneración, crecimiento y modelos dinámicos de bosques tropicales secos: herramientas para su conservación y para el uso sostenible de especies maderables” (11-CAP2-1730). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. We would like to thank all the staff and students of the Instituto Boliviano de Investigación Forestal (IBIF) for their support, particularly V. Vroomans for his help in the field. We sincerely acknowledge P. Roosenboom (INPA Co.) and his staff at Concepción (G. Urbano) for their help to sample and work on their property. We thank C.E.T. Paine, P.V.A. Fine, P. M. Ramsay and an anonymous reviewer for their constructive comments on an earlier version of this manuscript.