Leaf traits are crucial to seedling growth and survival, and their plasticity can influence seedling fitness in changing environments. Seedlings of Artemisia tridentata, a keystone shrub of the western North American sagebrush steppe, show heteromorphic leaf development. Early leaves are larger and less pubescent than those produced later, suggesting a shift from characteristics favouring rapid growth to those increasing drought tolerance. To investigate this hypothesis, we determined the specific leaf area (SLA) and the osmotic potential at full turgor (pi 0) of early and late leaves, and measured their stomatal conductance and photosynthetic rates as leaf water potential (Psi l) declined under imposed drought. We also examined whether water stress could trigger late leaf development. At high Psi l and per area, early and late leaves had similar photosynthetic rates. However, the SLA of early leaves was three times higher than that of late leaves, yielding higher photosynthetic rates per unit mass in the former. Late leaves had lower pi 0 and were less sensitive to drought, exhibiting a lower Psi l at 50% of maximum photosynthesis than early leaves. Drought triggered the shedding of early leaves and the initiation of late-like leaves. Formation of these leaves continued upon return to well-watered conditions, possibly indicating stress memory. The overall results suggest that early leaves enhance growth during wet springs following germination, while late leaves prolong photosynthesis as water potentials decline during summer drought. The adaptive value of early leaves may be diminishing due to changing environmental conditions that are accelerating the onset of drought. Seedlings of the drought-tolerant shrub big sagebrush (Artemisia tridentata) show leaves with different morphologies. Early leaves are larger and less pubescent than those produced later, suggesting a shift from characteristics favoring rapid growth to those increasing drought tolerance. We investigated this hypothesis by measuring photosynthesis under imposed drought and analyzing various leaf traits. Early leaves of well-watered seedlings had higher photosynthetic rates per unit mass than late leaves. However, as drought developed, the decline in photosynthesis was more gradual in late leaves. In young seedlings, drought triggered shedding of early leaves and initiation of late-like leaves. Formation of these leaves continued upon rewatering, possibly indicating stress memory. Our results suggest that early leaves enhance growth during wet springs following germination, while late leaves prolong photosynthesis during summer drought. The adaptive value of early leaves may be diminishing.