Climate change is expected to bring about changes in precipitation and temperature regimes that, together with rising atmospheric CO2 concentrations, will likely reorganise the functional trait composition of ecosystems. Predicting plant trait responses to emerg- ing environmental conditions including, in particular, water availability, is a tremendous challenge, but is one that eco-evolutionary optimality theory (EEO) can help us under- take. However, most EEO approaches are based on the hypothesis that traits are selected to maximise carbon assimilation which omits the important role that size growth plays in determining fitness outcomes. Using a height-growth based EEO framework, we pre- dict magnitude and directional shifts in four key traits: leaf mass per area, sapwood area to leaf area ratio (Huber value), wood density and sapwood-specific conductivity in response to variation in soil moisture availability, atmospheric aridity, CO2 and light availability. Consistent with empirical patterns, we predict that trait optima shift from resource-acquisitive strategies - characterised by low tissue constructions costs and high rates of tissue turnover and sapwood conductivity - to resource-conservative strategies - characterised by low rates of tissue turnover and greater xylem embolism resistance - as conditions become increasingly dry. The EEO model that we use here highlights the important role that both carbon assimilation and tissue construction costs jointly play in predicting the response of trait optima to the environment, laying the groundwork for future height-growth based EEO models aiming to predict shifts in the functional composition of ecosystems in response to global change.