Antarctic bryophyte communities presently tolerate physiological extremes in water availability, surviving both desiccation and submergence events. We investigated the relative ability of three Antarctic moss species to tolerate physiological extremes in water availability and identified physiological, morphological, and biochemical characteristics that assist species performance under such conditions. Tolerance of desiccation and submergence was investigated using chlorophyll fluorescence during a series of field- and laboratory-based water stress events. Turf water retention and degree of natural habitat submergence were determined from gametophyte shoot size and density, and δ¹³C signatures, respectively. Finally, compounds likely to assist membrane structure and function during desiccation events (fatty acids and soluble carbohydrates) were determined. The results of this study show significant differences in the performance of the three study species under contrasting water stress events. The results indicate that the three study species occupy distinctly different ecological niches with respect to water relations, and provide a physiological explanation for present species distributions. The poor tolerance of submergence seen in Ceratodon purpureus helps explain its restriction to drier sites and conversely, the low tolerance of desiccation and high tolerance of submergence displayed by the endemic Grimmia antarctici is consistent with its restriction to wet habitats. Finally the flexible response observed for Bryum pseudotriquetrum is consistent with its co-occurrence with the other two species across the bryophyte habitat spectrum. The likely effects of future climate change induced shifts in water availability are discussed with respect to future community dynamics.