In tropical forests, regional differences in annual rainfall correlate with differences in plant species composition. Although water availability is clearly one factor determining species distribution, other environmen- tal variables that covary with rainfall may contribute to distributions. One such variable is light availability in the understory, which decreases towards wetter forests due to differences in canopy density and phenology. We estab- lished common garden experiments in three sites along a rainfall gradient across the Isthmus of Panama in order to measure the differences in understory light availability, and to evaluate their influence on the performance of 24 shade- tolerant species with contrasting distributions. Within sites, the effect of understory light availability on species per- formance depended strongly on water availability. When water was not limiting, either naturally in the wetter site or through water supplementation in drier sites, seedling performance improved at higher light. In contrast, when water was limiting at the drier sites, seedling performance was reduced at higher light, presumably due to an increase in water stress that affected mostly wet-distribution spe- cies. Although wetter forest understories were on average darker, wet-distribution species were not more shade-tol- erant than dry-distribution species. Instead, wet-distribu- tion species had higher absolute growth rates and, when water was not limiting, were better able to take advantage of small increases in light than dry-distribution species. Our results suggest that in wet forests the ability to grow fast during temporary increases in light may be a key trait for successful recruitment. The slower growth rates of the dry-distribution species, possibly due to trade-offs associ- ated with greater drought tolerance, may exclude these species from wetter forests.