Plant responses to drought and their subsequent rehydration can provide evidence for forest dynamics within the context of climate change. In this study, the seedlings of two native species (Vitex negundo var. heterophylla, Quercus acutissima) and two exotic species (Robinia pseudoacacia, Amorpha fruticosa) to China were selected in a greenhouse experiment. The gas exchange, stem hydraulic parameters, plant osmoprotectant contents and antioxidant activities of the seedlings that were subjected to sustained drought and rehydration (test group) as well as those of well-irrigated seedlings (control group) were measured. The two native species exhibited a greater degree of isohydry with drought because they limited the stomatal opening timely from the onset of the drought. However, the two exotic species showed a more 'water spender'-like strategy with R. pseudoacacia showing anisohydric responses and A. fruticosa showing isohydrodynamic responses to drought. Severe drought significantly decreased the leaf gas exchange rates and hydraulic properties, whereas the instantaneous water use efficiency and osmoprotectant contents increased markedly. Most of the physiological parameters recovered rapidly after mild drought rehydration, but the water potential and/or supply of nonstructural carbohydrates did not recover after severe drought rehydration. The results demonstrate that the xylem hydraulic conductivity and shoot water potential jointly play a crucial role in the drought recovery of woody plants. In brief, the native species may play a dominant role in the future in warm-temperate forests because they employ a better balance between carbon gain and water loss than the alien species under extreme drought conditions.