Hydraulic traits were studied in temperate, woody evergreens in a high-elevation heath community to test for trade-offs between the delivery of water to canopies at rates sufficient to sustain photosynthesis and protection against disruption to vascular transport caused by freeze-thaw-induced embolism. Freeze-thaw-induced loss in hydraulic conductivity was studied in relation to xylem anatomy, leaf- and sapwood-specific hydraulic conductivity and gas exchange characteristics of leaves. We found evidence that a trade-off between xylem transport capacity and safety from freeze-thaw-induced embolism affects photosynthetic activity in overwintering evergreens. The mean hydraulically weighted xylem vessel diameter and sapwood-specific conductivity correlated with susceptibility to freeze-thaw-induced embolism. There was also a strong correlation of hydraulic supply and demand across species; interspecific differences in stomatal conductance and CO(2) assimilation rates were correlated linearly with sapwood- and leaf-specific hydraulic conductivity. Xylem vessel anatomy mediated an apparent trade-off between resistance to freeze-thaw-induced embolism and hydraulic and photosynthetic capacity during the winter. These results point to a new role for xylem functional traits in determining the degree to which species can maintain photosynthetic carbon gain despite freezing events and cold winter temperatures.