Unfavourable soil conditions frequently limit tree regeneration in mountain forests on calcareous bedrock. Rocky, shallow organic soils on dolomite pose a particular problem for tree regeneration due to commonly restricted water and nutrient supplies. Moreover, an often dense layer of understorey vegetation competes for the limited resources available. Hence, an array of interacting factors impairs tree seedlings' performance on dolomite, but there is little information on the ecophysiological mechanisms. We studied the effects of substrate, competing vegetation and foliar nutrient concentrations on the photosynthetic rate (A), stomatal conductance (gs) and leaf water potentials (ψ) of sycamore (Acer pseudoplatanus L.), beech (Fagus sylvatica L.), spruce [Picea abies (L.) Karst.] and larch (Larix decidua Mill.) under controlled (well-watered/drought-stressed) conditions and under prevailing field conditions. While A and gs of well-watered spruce in the pot experiment were reduced by the mineral substrate, the organic dolomite substrate with dense competing vegetation reduced gs and ψ of sycamore, spruce and larch under drought-stressed conditions in the field. For sycamore and spruce, A and gs were strongly correlated with foliar nitrogen (N) and potassium (K) concentrations in the pot experiment. In contrast, soil water primarily affected beech and larch. Finally, dense competing vegetation negatively affected A and gs of spruce and A of larch on dolomite. Our results highlight the critical role of N, K and water availability for tree seedlings in shallow soils on calcareous bedrock. On these sites, natural tree regeneration is at particular risk from episodic drought, a likely consequence of climate change.