Abstract: During the restoration of degraded ecosystems, different shrub species often segregate along environmental water gradients. However, the physiological mechanisms driving this segregation remain unclear. To address this gap, we conducted a drought stress experiment (well-watered, CK; moderate drought, MD; severe drought, SD) to explore the physiological mechanisms driving the dominance of different shrub species at various stages of ecosystem restoration. Salix gordejevii, a species dominant in the early stages of restoration with high water availability, and Caragana microphylla, a species dominant in the later stages under low water availability, were studied. The results showed that the living state index (LSI) of S. gordejevii was significantly lower than that of C. microphylla under drought stress (P < 0.05). Differences in plant hydraulics and water-use strategies explained how these species adapt to varying soil moisture conditions. S. gordejevii employed a proactive water-use strategy with lower water use efficiency (WUE) and reduced resistance to xylem embolism (xylem water potentials corresponding to 50% loss of conductivity, P50), making it better suited to environments with more abundant water. In contrast, C. microphylla adopted a conservative water-use strategy. This strategy was characterized by increased WUE, and enhanced resistance to drought-induced xylem embolism, which allowed it to thrive under more drought-prone conditions. Importantly, hydraulic efficiency (K_leaf, K_s, and K₁) emerged as the primary determinant of living state in both S. gordejevii (47.30%) and C. microphylla (62.20%). The lower embolism resistance of S. gordejevii (P₅₀=1.3 MPa) made it more susceptible to xylem cavitation, leading to a decline in hydraulic efficiency under SD. In contrast, C. microphylla’s higher embolism resistance (P₅₀=2.3 MPa) enabled it to maintain stable hydraulic conductance across all drought treatments. These differences in hydraulic efficiency, driven by xylem embolism resistance, were key factors influencing shifts in shrub dominance during ecosystem restoration. These findings provide a physiological explanation for the replacement of shrub species during ecosystem restoration, where soil moisture is the main limiting factor.

Key words: Degraded ecosystem restoration, Vegetation succession, Drought gradient, Living sate, Hydraulic traits, Water-use strategy