• N addition does not mitigate the negative effects of drought on growth. • Drought impairs water transport without significantly increasing embolism. • Starch remobilization in leaves maintains carbon supply under drought. • Leaf gas exchange directly drives growth, while hydraulics exert an indirect effect. Drought and nitrogen (N) deposition profoundly affect tree growth and adaptive strategies, but their interactive effects and physiological mechanisms remain unclear. In a factorial drought and N addition experiment, we investigated the responses of functional traits related to hydraulic conductivity, leaf gas exchange, non-structural carbohydrate (NSC) reserves, xylem anatomy, and root morphology along the root-stem-leaf water-conducting pathway, as well as the mechanisms driving the growth of Pinus koraiensis saplings. We found that N addition had negligible effects, whereas drought had significant negative impacts on multiple tested traits. Specifically, drought altered fine root morphology, producing a denser, thicker and shorter fine root system, reduced stem xylem hydraulic efficiency, decreased stomatal conductance, photosynthesis and leaf transpiration, ultimately leading to a lower growth rate. The decline in hydraulic conductivity under drought did not lead to an increase in the occurrence of cavitation-induced embolism. Additionally, starch reserves were mobilized and consumed under severe drought in the leaves but not in branches or roots, whereas soluble sugar contents did not respond to changes in drought levels. Further analyses indicated that leaf gas exchange directly influenced growth reduction under drought, while hydraulic conductivity had an indirect effect. These findings underscore the coordination of carbon and water dynamics across the whole plant when coping with drought, offering insights into tree adaptation strategies under climate change.