How forests respond to anthropogenic climate change raises challenging questions that are both fundamental and urgent. Vulnerability of forest to changing rainfall patterns and increasing extreme events such as droughts is clear from wide-spread tree mortality. Underlining processes, species-specific vulnerability and changes in forest function are, however, unclear. This thesis begins with addressing some perplexing issues in assessing forest tree growth response vis-à-vis rainfall gradients, both in space and time. It then addresses some fundamental questions as to where do trees source water from, and what is the dynamics of water availability by depth that species actually respond to in terms of growth and survival. It employs a novel method to assess species rooting depth at which trees actually uptake water over two decades and evaluates how belowground “hydrological niches” operate for these long-lived organisms that are trees; assisting their co-existence, but leading to differential fates under extreme drought.