We studied the leaf structural, water status, and fast fluorescence responses of two palms, Socratea exorrhiza and Scheelen zonensis, under natural dry season conditions in a clearing (high light [HL] palms) and the forest understory (low light [LL] palms) on Barro Colorado Island, Panama. HL-Socratea leaves were more shade-adapted, less xeromorphic, and more strongly affected by drought than HL-Scheelea. F-v/F-m, (the ratio of variable to maximum chlorophyll fluorescence) and t(1/2) (the half-rise time of F-m) was lower in HL-leaves of both species, indicating photoinhibition. In HL-Scheelea, the light-induced reduction of F-v/F-m was much less than in HL-Socratea, and F-v/F-m recovered completely overnight. Patterns of relative water content, specific leaf dry weight, stable carbon isotope composition, and leaf conductance suggest that increased drought resistance in Scheelea reduces susceptibility to photoinhibition. An increase in F-0 indicated the inactivation of PSII reaction centers in HL-Socratea. The very low chlorophyll a/b ratio and alterations in chloroplast ultrastructure in HL-Socratea are consistent with photoinhibition. Under LL, the species showed no appreciable interspecific differences in chlorophyll fluorescence. Excess light leads to low values of F-v/F-m in HL-plants relative to LL-plants on both leaf surfaces, particularly on the lower surface, due to a decrease of F-m in both surfaces and an increase in F-0 of lower surface. For both species, F-0 for the lower surfaces of HL-plants was higher and t(1/2) was markedly lower than for the upper surface, as is typical for shade-adapted leaves. Xeromorphic leaf structure may reduce susceptibility to photoinhibition during the dry season. Drought-enhanced photoinhibition could limit the ability of some species to exploit treefall gaps.