Drought- and insect-associated tree mortality at low-elevation ecotones is a widespread phenomenon but the underlying mechanisms are uncertain. Enhanced growth sensitivity to climate is widely observed among trees that die, indicating that a predisposing physiological mechanism(s) underlies tree mortality. We tested three, linked hypotheses regarding mortality using a ponderosa pine (Pinus ponderosa) elevation transect that experienced low-elevation mortality following prolonged drought. The hypotheses were: (1) mortality was associated with greater growth sensitivity to climate, (2) mortality was associated with greater sensitivity of gas exchange to climate, and (3) growth and gas exchange were correlated. Support for all three hypotheses would indicate that mortality results at least in part from gas exchange constraints. We assessed growth using basal area increment normalized by tree basal area [basal area increment (BAI)/basal area (BA)] to account for differences in tree size. Whole-crown gas exchange was indexed via estimates of the CO2 partial pressure difference between leaf and atmosphere (pa−pc) derived from tree ring carbon isotope ratios (δ13C), corrected for temporal trends in atmospheric CO2 and δ13C and elevation trends in pressure. Trees that survived the drought exhibited strong correlations among and between BAI, BAI/BA, pa−pc, and climate. In contrast, trees that died exhibited greater growth sensitivity to climate than trees that survived, no sensitivity of pa−pc to climate, and a steep relationship between pa−pc and BAI/BA. The pa−pc results are consistent with predictions from a theoretical hydraulic model, suggesting trees that died had a limited buffer between mean water availability during their lifespan and water availability during drought – i.e., chronic water stress. It appears that chronic water stress predisposed low-elevation trees to mortality during drought via constrained gas exchange. Continued intensification of drought in mid-latitude regions may drive increased mortality and ecotone shifts in temperate forests and woodlands.