Disentangling the relative roles of biotic and abiotic forces influencing forest structure, function, and local community composition continues to be an important goal in ecology. Here, utilizing two forest surveys 20-year apart from a Central American dry tropical forest, we assess the relative role of past disturbance and local climatic change in the form of increased drought in driving forest dynamics. We observe: (i) a net decrease in the number of trees; (ii) a decrease in total forest biomass by 7.7 Mg ha−1 but when calculated on subquadrat basis the biomass per unit area did not change indicating scale sensitivity of forest biomass measures; (iii) that the decrease in the number of stems occurred mainly in the smallest sizes, and in more moist and evergreen habitats; (iv) that there has been an increase in the proportion of trees that are deciduous, compound leaved and are canopy species, and a concomitant reduction in trees that are evergreen, simple-leaved, and understory species. These changes are opposite to predictions based on recovery from disturbance, and have resulted in (v) a uniform multivariate shift from a more mesic to a more xeric forest. Together, our results show that over relatively short time scales, community composition and the functional dominance may be more responsive to climate change than recovery to past disturbances. Our findings point to the importance of assessing proportional changes in forest composition and not just changes in absolute numbers. Our findings are also consistent with the hypothesis that tropical tree species exhibit differential sensitivity to changes in precipitation. Predicted future decreases in rainfall may result in quick differential shifts in forest function, physiognomy, and species composition. Quantifying proportional functional composition offers a basis for a predictive framework for how the structure, and diversity of tropical forests will respond to global change.