Today, angiosperms are fundamental players in the diversity and biogeochemical functioning of the planet. Yet despite the omnipresence of angiosperms in today's ecosystems, the basic evolutionary understanding of how the earliest angiosperms functioned remains unknown. Here we synthesize ecophysiological, paleobotanical, paleoecological, and phylogenetic lines of evidence about early angiosperms and their environments. In doing so, we arrive at a hypothesis that early angiosperms evolved in evermoist tropical terrestrial habitats, where three of their emblematic innovations – including net-veined leaves, xylem vessels, and flowers – found ecophysiological advantages. However, the adaptation of early angiosperm ecophysiology to wet habitats did not initially promote massive diversification and ecological dominance. Instead, wet habitats were permissive for the ecological roothold of the clade, a critical phase of early diversification that entailed experimentation with a range of functional innovations in the leaves, wood, and flowers. Later, our results suggest that some of these innovations were co-opted gradually for new roles in the evolution of greater productivity and drought tolerance, which are characteristics seen across the vast majority of derived and ecologically dominant angiosperms today.