We studied a guild of desert winter annual plants that differ in long-term variation in per capita reproductive success (lb, the product of per capita survival from germination to reproduction, l, times per capita reproduction of survivors, b) to relate individual function to population and community dynamics. We hypothesized that variation in lb should be related to species' positions along a trade-off between relative growth rate (RGR) and photosynthetic water-use efficiency (WUE) because lb is a species-specific function of growing-season precipitation. We found that demographically variable species have greater RGR and greater leaf carbon isotope discrimination (Δ, a proxy inversely related to WUE). We examined leaf nitrogen and photosynthetic characteristics and found that, in this system, variation in Δ is a function of photosynthetic demand rather than stomatal regulation of water loss. The physiological characteristics that result in low Δ in some species may confer greater photosynthetic performance during the reliably moist but low temperature periods that immediately follow winter rainfall in the Sonoran Desert or alternatively during cool periods of the day or early growing season. Conversely, while species with high Δ and high RGR exhibit low leaf N, they have high biomass allocation to canopy leaf area display. Such trait associations may allow for greater performance during the infrequent conditions where high soil moisture persists into warmer conditions, resulting in high demographic variance. Alternatively, high variance could arise from specialization to warm periods of the day or season. Population dynamic buffering via stress tolerance (low RGR and Δ) correlates negatively with buffering via seed banks, as predicted by bet-hedging theory. By merging analyses of population dynamics with functional trait relationships, we develop a deeper understanding of the physiological, ecological, and evolutionary mechanisms involved in population and community dynamics.