The degree of winter desiccation and the limits of tolerance of seedlings and saplings of the deciduous conifer, Larix lyallii Parl., were assessed in a timberline environment in the Rocky Mountains of Canada. Seedlings of subalpine larch carry a large component of wintergreen needles for 20-25 yr on unshaded sites. These wintergreen needles were determined, by experimental snowpack manipulation, to dehydrate rapidly and die when not protected by the snowpack in winter. Protection from the snowpack appears to be necessary for establishment of this species on unshaded sites. Short shoot buds, which produced deciduous needles in the following growing season, were not damaged by twig xylem pressure potentials of <-6,5 MPa. Minimum levels of this parameter determined under natural conditions on seedling twigs, exposed above the snowpack, were -3.6 MPa and in the same year only -2,5 to -3.2 MPa in sapling twigs. The water potentials of buds dissected from these twigs were significantly different from the measured xylem pressure potentials from October through January indicating a very large resistance to water flux between the bud tissues and the xylem. The water potential of the buds reached a minimum in midwinter, while measurements of xylem pressure potential were lowest in late winter and early spring. The deciduous habit appears to confer not only a great deal of desiccation resistance but also a significant advantage in desiccation tolerance. This advantage may be important for the numerous other deciduous timberline species.