The invasion of habitats with novel environmental challenges may require physiological tolerances not seen in conspecifics from the native range. We used a combination of field and laboratory-based experiments to assess physiological tolerance to limited water access at four sites distributed across the historical invasion path of cane toads (Rhinella marina) in Australia that, from east to west, alternated between mesic and seasonally xeric habitats. Toads from all locations were well hydrated at the time of capture. However, experimental dehydration caused greater mass loss, higher plasma osmolality, and inhibition of lytic ability in toads from xeric compared to mesic locations. These results suggest somewhat surprisingly that toads from xeric environments are physiologically more vulnerable to water loss. In contrast, bactericidal ability was not sensitive to hydric state and was greater in toads from eastern (long-colonized) areas. Similar patterns in lytic ability in hydrated toads and agglutination ability in wild toads suggest that toads along the invasion front face a tradeoff between enhanced dispersal ability and physiological responses to dehydration. The ability of this invasive species to spread into drier environments may be underpinned by a combination of phenotypic plasticity and evolved (heritable) traits.