Under future climate drought-induced tree mortality may result in the contraction of species ranges and the reorganization of community composition where abundant and peripheral species exchange their patterns of dominance. Predicting these changes will be challenging because the future suitable habitat may be a mismatch for the current bioclimatic envelope because of discrepancies between the realized and fundamental niche. Here we evaluate the extent of the discrepancy, as applied to tree species in relation to their relative field-recorded drought sensitivities and their observed range-wide environmental moisture envelopes. The hypothesis tested was that different species levels of drought-induced damage at sites where they co-occur will be positively associated with the minimum moisture availability in the most drought-prone part of each species current geographic range. We tested the hypothesis using drought damage measurements for 13 Australian Myrtaceae (including Eucalyptus) tree species at a site where all co-occur, together with 120 years of climate data across their geographical ranges. With limited statistical power the results generated only modest support for the hypothesis suggesting limited capacity to predict future distributions under climate change scenarios. In spite of the poor dispersal capacities of Eucalyptus and allied genera, but consistent with knowledge of breeding systems and genetic variability within Eucalyptus, the findings also suggest that many species have a capacity for rapid adaptive response to climate change, including the vicissitudes of the late Quaternary.