This study is the first to quantify tree water use below 50°S. Tree morphology differs markedly among the two investigated species, reflecting adjustment to different environmental cues. A pronounced environmental gradient dictates the dominance of Nothofagus in the foothills on the eastern side of the Andes Mountains in Patagonia, Argentina. Below 50° southern latitude, open forests of Nothofagus antarctica (nire) dominate the landscape towards the Patagonian steppe where annual rainfall is low. With increasing rates of annual rainfall, corresponding with an increase in elevation, closed forests of N. pumilio (lenga) replace those of nire. During a short-term study we assessed differences in stand structure and examined environmental, structural and functional traits related to tree water use of nire and lenga. Sap velocity reached similar maximum rates (95–100 L m−2 sapwood h−1), but whole-tree water use (Q) was significantly lower in nire (8–13 L day−1 tree−1) compared to lenga (20–90 L day−1 tree−1) resulting in lower stand transpiration (nire: 0.51 mm day−1; lenga: 3.42 mm day−1) despite similar tree densities. Related to this, wind speed had a particularly significant impact on Q of nire, but not lenga. The ratio of leaf area to sapwood area (A L/A S) clearly identified nire to be more structurally proficient at conserving water. While stem diameter (DBH) and crown area (A C) were well related in both species, only lenga exhibited relationships between variables related to tree allometry and physiology (A C/Q, DBH/Q). Our results provide the first ecophysiological characterization of the two Nothofagus species that define important and widespread ecosystems in southern Patagonia (not only below 50°S), and provide useful data to scale water use of both species from tree to stand.