Large areas in the tropics and at mid-latitudes experience pronounced seasonality and inter-annual variability in rainfall and hence water availability. Despite the importance of these seasonally dry ecosystems (SDEs) for the global carbon cycling and in providing ecosystem services, a unifying ecohydrological framework to interpret the effects of climatic variability on SDEs is still lacking. A synthesis of existing data about plant functional adaptations in SDEs, covering some 400 species, shows that leaf phenological variations, rather than physiological traits, provide the dominant control on plant-water-carbon interactions. Motivated by this result, the combined implications of leaf phenology and climatic variability on plant water use strategies are here explored with a minimalist model of the coupled soil water and plant carbon balances. The analyses are extended to five locations with different hydroclimatic forcing, spanning seasonally dry tropical climates (without temperature seasonality) and Mediterranean climates (exhibiting out of phase seasonal patterns of rainfall and temperature). The most beneficial leaf phenology in terms of carbon uptake depends on the climatic regime: evergreen species are favoured by short dry seasons or access to persistent water stores, whereas high inter-annual variability of rainy season duration favours the coexistence of multiple drought-deciduous phenological strategies. We conclude that drought-deciduousness may provide a competitive advantage in face of predicted declines in rainfall totals, while reduced seasonality and access to deep water stores may favour evergreen species. This article has been contributed to by US Government employees and their work is in the public domain in the USA.