Traits that promote rapid growth and seedling recruitment when water is plentiful may become a liability when seedlings encounter drought. We tested the hypothesis that CO2 enrichment reinforces any tradeoff between growth rate and drought tolerance by exaggerating interspecific differences in maximum relative growth rate (RGR) and survivorship of drought among seedlings of five woody legumes. We studied invasive species of grasslands that differ in distribution along a rainfall gradient. Survivorship of drought at ambient CO2 concentration ([CO2]) was negatively related to RGR in well-watered seedlings in one of two experiments, but the relationship was weak because interspecific differences in RGR were small. Contrary to our hypothesis, there was no significant relationship among well-watered seedlings between RGR at ambient [CO2] and either the relative or absolute increase in RGR at elevated [CO2]. As predicted, however, CO2 enrichment reinforced interspecific differences in survivorship of seedlings exposed to similar rates of soil water depletion. Doubling [CO2] improved seedling survivorship of the most drought-tolerant species throughout the period of soil water depletion, but did not consistently affect survivorship of more drought-sensitive species. Midday xylem pressure potentials of drought-treated seedlings were less negative at elevated [CO2] than at ambient [CO2], but no other measured trait was consistently correlated with improved survivorship at high [CO2]. Carbon dioxide enrichment may not reinforce species differences in RGR, but could exaggerate interspecific differences in drought tolerance. To the extent that seedling persistence in grasslands correlates with drought survivorship, our results indicate a positive effect of CO2 enrichment on recruitment of woody legumes that are currently tolerant of drought.