Desert dunes and interdunes provide habitat heterogeneity and profoundly influence the spatial and temporal distribution of water and nutrients throughout the landscape. These underlying physical processes shape the plant species composition and their ecophysiology. Spinifex grasses dominate the vegetation throughout much of Australia and are categorised into two groups; ‘soft’ species occur mostly in northern, subtropical to semiarid regions, whereas ‘hard’ species occur mostly throughout the dry centre and southern interior. This study examined the water and nutrient relations and leaf anatomy of dominant ‘soft’ and ‘hard’ spinifex in the Great Sandy Desert, where their distributions overlap. The ‘soft’ species, Triodia schinzii (Henrard) Lazarides, occurs only on sand dunes, whereas the ‘hard’ species, T. basedowii E.Pritz., is restricted to the flat interdunes. We proposed two hypotheses: 1) that the dune species, T. schinzii would display more favourable water status and 2) the interdune species, T. basedowii would display higher leaf nutrient concentrations. Triodia schinzii displayed significantly less negative leaf water potentials at predawn and at midday (–0.4 and –2.0 MPa, respectively) than T. basedowii (–0.9 and –3.0 MPa, respectively) throughout the middle of the dry season. Photosynthesis rates were also significantly higher in T. schinzii than T. basedowii in the wet season (140 v. 84 nmol g^–1 s^–1), but there were no significant differences between species in leaf conductance. Leaf δ¹³C composition confirmed anatomical observations that both species were C₄ and supported the finding that T. schinzii displayed significantly greater photosynthetic water-use efficiency during the wet season than T. basedowii. In general, foliar nutrient concentrations were not significantly different between species; however, both species exhibited especially low leaf P and to a lesser extent N. We conclude that water is more readily available in the dune than the interdune as a result of greater soil depth and associated water storage capacity. These properties are considered the main factors influencing plant species distribution. Given the climatic and geographic distribution of these two Triodia species, it is suggested that sand dunes provide a mesic corridor for T. schinzii to extend its range from higher rainfall areas into the arid interior.