Tropical dry forests (TDF) are one of the most threatened and poorly protected ecosystems in the Americas. Although there are international efforts for the restoration of TDF, how stress factors such as herbivory or water limitation due to changes in precipitation, impact the regeneration dynamics of these forests is poorly understood. Specifically, how seedlings of key tree species for TDF restoration cope with current abiotic pressures such as the intensification of climatic events, and biotic factors like herbivory, is not yet fully understood. Here, we compared seedling performance, and allocation of biomass, and water to roots vs. shoots for three legume, and one non-legume TDF tree species, as a response to water limitation and herbivory in an 8-month greenhouse experiment. Contrary to our expectations, we found that the non-legume species, G. ulmifolia, had the best performance compared to legumes, while N-fixing and non-fixing legumes showed similar performance. Based on our findings, we suggest the use of G. ulmifolia in TDF restoration projects due to its high performance despite abiotic and biotic stress factors, its allocation of biomass and water to belowground structures. We also recommend the use of N-fixing legume species owing to their ability to fix nitrogen, which guarantees an N input to the soil, important in the first stages of succession. However, the legume species used in this experiment do not appear to resist the abiotic and biotic stressors studied. Thus, more studies exploring the response of dry forest plant species to stress factors are key for informing and assuring more effective TDF restoration efforts.