Leaf shrinkage with dehydration has attracted attention for over 100 years, especially as it becomes visibly extreme during drought. However, little has been known of its correlation with physiology. Computer simulations of the leaf hydraulic system showed that a reduction of hydraulic conductance of the mesophyll pathways outside the xylem would cause a strong decline of leaf hydraulic conductance (K leaf ). For 14 diverse species, we tested the hypothesis that shrinkage during dehydration (i.e. in whole leaf, cell and airspace thickness, and leaf area) is associated with reduction in K leaf at declining leaf water potential (C leaf ). We tested hypotheses for the linkage of leaf shrinkage with structural and physiological water relations parameters, including modulus of elasticity, osmotic pressure at full turgor, turgor loss point (TLP), and cuticular conductance. Species originating from moist habitats showed substantial shrinkage during dehydration before reaching TLP, in contrast with species originating from dry habitats. Across species, the decline of K leaf with mild dehydration (i.e. the initial slope of the K leaf versus C leaf curve) correlated with the decline of leaf thickness (the slope of the leaf thickness versus C leaf curve), as expected based on predictions from computer simulations. Leaf thickness shrinkage before TLP correlated across species with lower modulus of elasticity and with less negative osmotic pressure at full turgor, as did leaf area shrinkage between full turgor and oven desiccation. These findings point to a role for leaf shrinkage in hydraulic decline during mild dehydration, with potential impacts on drought adaptation for cells and leaves, influencing plant ecological distributions.