Physiological traits that control the uptake of carbon dioxide and loss of water are key determinants of plant growth and reproduction. Variation in these traits is often correlated with environmental gradients of water, light, and nutrients, suggesting that natural selection is the primary evolutionary mechanism responsible for physiological diversification. Responses to selection, however, can be constrained by the amount of standing genetic variation for physiological traits and genetic correlations between these traits. To examine the potential for constraint on adaptive evolution, we estimated the quantitative genetic basis of physiological trait variation in one population of each of two closely related species (Lobelia siphilitica and L. cardinalis). Restricted maximum likelihood analyses of greenhouse-grown half-sib families were used to estimate genetic variances and covariances for seven traits associated with carbon and water relations. We detected significant genetic variation for all traits in L. siphilitica, suggesting that carbon-gain and water-use traits could evolve in response to natural selection in this population. In particular, narrow-sense heritabilities for photosynthetic rate (A), stomatal conductance (g_s), and water-use efficiency (WUE) in our L. siphilitica population were high relative to previous studies in other species. Although there was significant narrow-sense heritability for A in L. cardinalis, we detected little genetic variation for traits associated with water use (g_s and WUE), suggesting that our population of this species may be unable to adapt to drier environments. Despite being tightly linked functionally, the genetic correlation between A and g_s was not strong and significant in either population. Therefore, our L. siphilitica population would not be genetically constrained from evolving high A (and thus fixing more carbon for growth and reproduction) while also decreasing g_s to limit water loss. However, a significant negative genetic correlation existed between WUE and plant size in L. siphilitica, suggesting that high WUE may be negatively associated with high fecundity. In contrast, our results suggest that any constraints on the evolution of photosynthetic and stomatal traits of L. cardinalis are caused primarily by a lack of genetic variation, rather than by genetic correlations between these functionally related traits.