Drought stress is one of the most important factors in limiting the survival and growth of plants in the harsh karst habitats of southwestern China, especially at the seedling establishment stage. The ecophysiological response to drought stress of native plants with different growth forms is useful for re-vegetation programs. Two shrub and four tree species were studied, including Pyracantha fortuneana (evergreen shrub), Rosa cymosa (deciduous shrub), Cinnamomum bodinieri (evergreen tree), and other three deciduous trees, Broussonetia papyrifera, Platycarya longipes, and Pteroceltis tatarinowii. The seedlings were randomly assigned to four drought treatments, i.e., well-watered, mild drought stress, moderate drought stress, and severe drought stress. Leaf water relations, gas exchange, chlorophyll fluorescence, and growth of the seedlings were investigated. Under severe drought stress, the two shrubs with low leaf area ratio (LAR) maintained higher water status, higher photosynthetic capacity, and larger percent biomass increase than the most of the trees. The two shrubs also had lower specific leaf area, greater intrinsic water use efficiency, and thermal dissipation than the trees. This suggested that the two shrubs had high tolerance to severe drought and were suitable for re-vegetation in harsh habitats. The evergreen C. bodinieri exhibited higher leaf mass ratio (LMR) and LAR than the deciduous species under mild and moderate stress. However, the low maximum quantum efficiency of PSII photochemistry (F v /F m ) and net assimilation rate, and the sharp decreases of water potential, LMR, LAR, and biomass under severe stress indicated C. bodinieri's weak tolerance to severe drought. In response to drought stress, the three deciduous trees revealed sharp reductions of biomass due to the large drought-induced decreases of gas exchange, LAR, and LMR. Under drought conditions, the deciduous trees minimized water loss by stomatal closure and by reducing transpiration leaf area and light harvesting through shedding leaves. This suggested that the three deciduous trees were more sensitive to water availability than the shrubs and used avoidance strategies against drought stress. However, the better growth performance of the deciduous trees than that of the shrubs under favorable conditions suggested that deciduous trees could be suitable for habitats with mild and temporary drought stress.