The ability to cope with water limitation influences plant distributions, and several plant traits have been interpreted as adaptations to drought stress. In Scandinavia, the perennial herb Arabidopsis lyrata occurs in open habitats that differ widely in climate and water availability in summer, suggesting differential selection on drought-related traits. We conducted two greenhouse experiments to examine differentiation in drought response traits among six Scandinavian populations, and to determine whether leaf trichomes confer protection against drought. We quantified tolerance to drought as fitness (survival and biomass of survivors) when exposed to drought relative to fitness under non-drought conditions. Two Swedish populations from shores along the Bothnian Bay had higher tolerance to drought than four riverbed populations from Norway. Under conditions of drought, the shore populations experienced less leaf damage compared to the riverbed populations, and their survival and biomass were less reduced relative to non-drought conditions. Across populations, tolerance to drought was positively related to leaf mass per area and negatively related to flowering propensity and proportion roots, but not related to plant size at the initiation of the drought treatment. In populations polymorphic for trichome production, trichome-producing plants were more tolerant to drought than glabrous plants. The results suggest that both leaf morphology and life-history traits contribute to differential drought response in natural populations of A. lyrata, and that this system offers excellent opportunities for examining the adaptive value and genetic basis of drought-related traits.