In fire-prone vegetation many plants bear thick woody fruits that retains seeds and insulate these seeds from heat. However, in the same vegetation, some plants retain seeds in thin indehiscent fruits that offer little protection from heat. The function of these thin indehiscent fruits is unknown. We investigated two closely related Kunzea species that occur together in fire-prone vegetation, namely eucalypt woodland. We also studied naturally occurring hybrids of these two species. K. rupestris bears indehiscent thin-walled fruit, whereas K. capitata bears fruit that dehisce to release seed on maturity. Hybrid fruits partly dehisce but retain seed. Studies of seed viability, dormancy and germination demonstrate a distinct combination of these traits for both species. Hybrid seed also has a unique combination of these traits, having some characteristics of both species. The indehiscent capsules impart dormancy to retained seed. However, K. capitata seed, which is not retained in fruit, also displays dormancy. In K. capitata, dormancy is associated with a water-impermeable seed coat. Surprisingly, seed retained in indehiscent capsules was found to have lower viability when exposed to heat than seed that had been released from capsules and exposed to heat.