We assessed growth and physiological responses of Eucalyptus and Corymbia species to water limitation aiming to widen possibilities for plantations in dry climatic conditions. We selected 16 taxa: 4 Corymbia and 12 Eucalyptus species from the Subgenera Symphyomyrtus. Seedlings were evaluated from 100 to 170 days after sowing. Growth and physiological traits showed significant differences among taxa and between two levels of water availability. Water limitation significantly impacted biomass production and physiological characteristics, however in different levels. Leaf area and biomass production decreased 15%–48% under water limitation among taxa. Eucalyptus moluccana, CCV 2, and VM1 (drought tolerant clone) showed the largest decrease in leaf area. Transpiration across taxa decreased 30%–57% and photosynthesis 14%–48% under water limited condition. Taxa from cold environments were less responsive in leaf area reduction under water limitation, and taxa from Exsertaria section showed lower reduction in photosynthesis (E. camaldulensis showed the lowest reduction). Responses to water limitation are related to the environment of origin. E. molucana, the only Adnataria species from a high precipitation region (>1500 mm year−1), was one of the most sensitive in reduction of biomass production, different behavior from the other Adnataria species, originated in regions with rainfall <750 mm year−1. Water limitation increased leaf-level water use efficiency by 18% on average, 8% in E. longirostrata, and 28% in E. camaldulensis, E. brassiana, and E. crebra. Growth and physiological responses observed show the potential of different eucalypts taxa to tolerate water limited environments.