Seasonally dry ecosystems present a challenge to plants to maintain water relations. While native vegetation in seasonally dry ecosystems have evolved specific adaptations to the long dry season, there are risks to introduced exotic species. African mahogany, Khaya senegalensis Desr. (A. Juss.), is an exotic plantation species that has been introduced widely in Asia and northern Australia, but it is unknown if it has the physiological or phenotypic plasticity to cope with the strongly seasonal patterns of water availability in the tropical savanna climate of northern Australia. We investigated the gas exchange and water relations traits and adjustments to seasonal drought in K. senegalensis and native eucalypts (Eucalyptus tetrodonta F. Muell. and Corymbia latifolia F. Muell.) in a savanna ecosystem in northern Australia. The native eucalypts did not exhibit any signs of drought stress after 3 months of no rainfall and probably had access to deeper soil moisture late into the dry season. Leaf water potential, stomatal conductance, transpiration and photosynthesis all remained high in the dry season but osmotic adjustment was not observed. Overstorey leaf area index (LAI) was 0.6 in the native eucalypt savanna and did not change between wet and dry seasons. In contrast, the K. senegalensis plantation in the wet season was characterized by a high water potential, high stomatal conductance and transpiration and a high LAI of 2.4. In the dry season, K. senegalensis experienced mild drought stress with a predawn water potential -0.6 MPa. Overstorey LAI was halved, and stomatal conductance and transpiration drastically reduced, while minimum leaf water potentials did not change (-2 MPa) and no osmotic adjustment occurred. Khaya senegalensis exhibited an isohydric behaviour and also had a lower hydraulic vulnerability to cavitation in leaves, with a P50 of -2.3 MPa. The native eucalypts had twice the maximum leaf hydraulic conductance but a much higher P50 of -1.5 MPa. Khaya senegalensis has evolved in a wet-dry tropical climate in West Africa (600-800 mm) and appears to be well suited to the seasonal savanna climate of northern Australia. The species exhibited a large phenotypic plasticity through leaf area adjustments and conservative isohydric behaviour in the 6 months dry season while operating well above its critical hydraulic threshold.