Frequent observations of higher mortality in larger trees than in smaller ones during droughts have sparked an increasing interest in size-dependent drought-induced mortality. However, the underlying physiological mechanisms are not well understood, with height-associated hydraulic constraints often being implied as the potential mechanism driving increased drought vulnerability. We performed a quantitative synthesis on how key traits that drive plant water and carbon economy change with tree height within species and assessed the implications that the different constraints and compensations may have on the interacting mechanisms (hydraulic failure, carbon starvation and/or biotic-agent attacks) affecting tree vulnerability to drought. While xylem tension increases with tree height, taller trees present a range of structural and functional adjustments, including more efficient water use and transport and greater water uptake and storage capacity, that mitigate the path-length-associated drop in water potential. These adaptations allow taller trees to withstand episodic water stress. Conclusive evidence for height-dependent increased vulnerability to hydraulic failure and carbon starvation, and their coupling to defence mechanisms and pest and pathogen dynamics, is still lacking. Further research is needed, particularly at the intraspecific level, to ascertain the specific conditions and thresholds above which height hinders tree survival under drought.