Desiccation tolerance (DT) is the ability of plants to tolerate low leaf water content from which they can recover when water becomes available. DT species mostly occur in seasonally-dry environments, tropical rocky outcrops such as the campos rupestres. Velloziaceae, a prominent family in the campos rupestres, comprises both DT and non-DT species. We tested if DT Vellozia nivea was associated with low productivity under mild drought conditions and survival under extreme drought. We measured traits related to drought resistance (turgor loss point – ΨTLP), plant functioning and productivity (e.g., gas exchange, biomass), non-structural carbohydrate dynamics and mortality in two species, one DT and one non-DT Vellozia species in two water-stress experiments simulating mild and extreme drought. Both species had similar survival rates under mild drought conditions, but the DT species had a lower productivity. Under extreme drought, the dynamics of non-structural carbohydrates was similar in both species but only the non-DT species died, and the cause of mortality was likely hydraulic dysfunction, as they died after reaching ΨTLP. All individuals of the DT species desiccated when they reached ΨTLP but rehydrated after re-watering. We show that the DT strategy in V. nivea implies a costs in terms of productivity, specially under mild drought conditions, but it allows survival under extreme drought, indicating a trade-off between productivity and survival in the DT species. Climate change predictions with more frequent and severe droughts will likely affect the abundance and distribution of DT and non-DT taxa.