Extreme drought conditions across the globe are impacting biodiversity with serious implications for the persistence of native species. However, quantitative data on drought tolerance is not available for diverse flora to inform conservation management. We quantified physiological drought tolerance in the diverse Hakea genus (Proteaceae) to test predictions based on climatic-origin, life history and functional traits. We sampled terminal branches of replicate plants of 16 species in a common garden. Xylem cavitation was induced in branches under varying water potential (tension) in a centrifuge and the tension generating 50% loss of conductivity (stem P50) was characterized as a metric for drought tolerance. The same branches were used to estimate plant functional traits, including wood density, specific leaf area, and Huber value (sap flow area to leaf area ratio). There was significant variation in stem P50 among species, which was negatively associated with the species climate-origin (rainfall and aridity). Drought tolerance did not differ among life histories; however, a drought avoidance strategy with terete leaf form and greater Huber value may be important for species to colonize and persist in the arid biome. Our findings will contribute to future prediction of species vulnerability to drought and adaptive management under climate change.