Drosophila hydei is more abundant under colder and drier montane habitats in the western Himalayas as compared to Drosophila repleta, but the mechanistic basis of such climatic adaptation is largely unknown. In this study of two closely related Drosophila species, D. hydei and D. repleta, we examined the role of dehydration tolerance on survival under desiccating conditions. Water loss before succumbing to death (dehydration tolerance) is much higher in D. hydei (~ 74%) than D. repleta (~ 48%). Total surface lipids and percent melanisation did not differ significantly in these two species. Thus, species-specific water loss tolerance capacities are significantly correlated with varying levels of desiccation resistance. Patterns of rate of water loss do not account for contrasting levels of desiccation resistance in these two species. These differences in dehydration tolerance impact desiccation resistance and might explain their distribution pattern – why D. hydei is more abundant than D. repleta in dry habitats or during dry periods.