Water availability is a critical driver of population dynamics in arid zones, and plant recruitment is typically episodic in response to rainfall. Understanding species' germination thresholds is key for conservation and restoration initiatives. Thus, we investigated the role of water availability in the germination traits of keystone species in an arid ecosystem with stochastic rainfall. We measured seed germination responses of five arid species, along gradients of temperature and water potential under controlled laboratory conditions. We then identified the cardinal temperatures and base water potentials for seed germination, and applied the hydrotime model to assess germination responses to water stress. Optimum temperatures for germination ranged from 15 to 31 °C under saturated conditions (0 MPa), and three species had low minimum temperatures for germination (<3 °C). A small proportion of seeds of all species germinated under dry conditions (ψ ≤ -1 MPa), although base water potential for germination (ψb50) ranged from -0.61 to -0.79 MPa. Species adhered to one of two germination traits: (i) the risk-takers which require less moisture availability for germination, and which can germinate over a wider range of temperatures irrespective of water availability (Casuarina pauper and Maireana pyramidata), and (ii) the risk-avoiders which have greater moisture requirements, a preference for cold climate germination, and narrower temperature ranges for germination when water availability is low (Atriplex rhagodioides, Maireana sedifolia and Hakea leucoptera). High seed longevity under physiological stress in H. leucoptera, combined with a risk-avoiding strategy, allows bet-hedging. The hydrotime model predicted lower base water potentials for germination than observed by the data, further supporting our assertion that these species have particular adaptations to avoid germination during drought. This study provides insights into the complex physiological responses of seeds to environmental stress, and relates seed germination traits to community dynamics and restoration in arid zones.