The ability of tree species to acclimate and tolerate projected increases in drought frequency and intensity has fundamental implications for future forest dynamics with climate change. Inquiries to date on the drought tolerance capacities of tree species, however, have focused almost exclusively on mature trees with scant in situ work on seedlings, despite the central role that regeneration dynamics play in forest responses to changing conditions. We subjected naturally established seedlings of co-dominant subalpine conifer species (Abies lasiocarpa and Picea engelmannii) in the southern Rocky Mountains to 2 years of in situ summer precipitation exclusion, simulating summer drought conditions similar to a failure of the North American monsoon. We compared the morphological and physiological responses of seedlings growing in drought vs. ambient conditions to assess the relative changes in drought tolerance traits as a function of seedling size. Drought treatments had a marked impact on soil moisture: volumetric water content averaged ≈5–8 % in drought treatments and ≈8–12 % in ambient controls. We detected no significant shifts in morphology (e.g. root biomass, leaf:stem area ratio) in response to drought for either species, but net photosynthesis in drought treatments was 78 % lower for spruce and 37 % lower for fir. Greater stomatal control associated with increasing stem diameter conferred greater water use efficiencies in larger seedlings in both species but was not significantly different between drought and ambient conditions, suggesting an overall lack of responsivity to water stress and a prioritization of carbon gain over investment in drought mitigation traits. These results indicate a canonization of traits that, while useful for early seedling establishment, may portend substantial vulnerability of subalpine seedling populations to prolonged or recurrent droughts, especially for spruce.