Patterns of β-diversity in a highly diverse tropical dry forest tree community are described; the contribution of environmental heterogeneity and distance to β-diversity was assessed. Significant differences in elevation, insolation, slope and soil water holding capacity (p < 0.01), variables related to water availability, were found among 8 30 m × 100 m transects laid along contrasting slopes of a system of three parallel microbasins. A gradient in elevation and insolation was found within north-facing transects, among 10 m × 10 m sites; south-facing transects showed an elevation gradient while crest transects showed a gradient in water holding capacity. In total 119 species were registered, with 27 to 64 species per transect, and 4 to 16 species per site. A large β-diversity was found among and within transects; two indices of β-diversity consistently showed a higher β-diversity within transects than among them. Among transects, 64% of the variance in species composition could be attributed to the environmental variables; an additional 22% to the spatial distribution of sites. Within transects, 42% of the deviance in β-diversity values was explained by insolation, and 19% by distance. β-diversity increased with distance and with difference in insolation among sites; north-facing transects, those with most contrasting insolation conditions, had the steepest increase in β-diversity with distance. Such increase was clearly associated with changes in species composition, not with changes in species richness.Nomenclature: Lott (1993; in press).Abbreviations: AWHC = Available water holding capacity; TDF = Tropical dry forest.