PremiseAdaptive divergence across environmental gradients is a key driver of speciation. Precipitation seasonality gradients are common in the tropics, yet drought adaptation is nearly unexplored in neotropical understory herbs. Here, we examined two recently diverged neotropical spiral gingers, one adapted to seasonal drought and one reliant on perennial water, to uncover the basis of drought adaptation.MethodsWe combined ecophysiological trait measurements in the field and greenhouse with experimental and observational assessments of real‐time drought response to determine how Costus villosissimus (Costaceae) differs from C. allenii to achieve drought adaptation.ResultsWe found that drought‐adapted C. villosissimus has several characteristics indicating flexible dehydration avoidance via semi‐drought‐deciduousness and a fast economic strategy. Although the two species do not differ in water‐use efficiency, C. villosissimus has a more rapid growth rate, lower leaf mass per area, lower stem density, higher leaf nitrogen, and a strong trend of greater light‐saturated photosynthetic rates. These fast economic strategy traits align with both field‐based observations and experimental dry‐down results. During drought, C. villosissimus displays facultative drought‐deciduousness, losing lower leaves during the dry season and rapidly growing new leaves in the wet season.ConclusionsWe revealed a drought adaptation strategy that has not, to our knowledge, previously been documented in tropical herbs. This divergent drought adaptation evolved recently and is an important component of reproductive isolation between C. villosissimus and C. allenii, indicating that adaptive shifts to survive seasonal drought may be an underappreciated axis of neotropical understory plant diversification.