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Identifying key traits that shape trade-offs that restrict species to only a subset of environmental gradients is crucial to understanding and predicting species turnover. Previous field experiments have shown that larvae of Lestes damselfly species segregate along the entire gradient of pond permanence and predator presence and that differential predation risk and life history constraints together shape their distribution. Here, we report laboratory experiments that identify key differences in behavior and physiology among species that structure their distributions along this gradient. The absence of adaptive antipredator behavioral responses against large dragonfly larvae and fish of Lestes dryas, the only species to inhabit predator-free vernal ponds that dry each year, is consistent with its high vulnerability to predation and probably the key trait that excludes it from parts of the gradient with predators. The reciprocal dominance of two other Lestes species in permanent waters dominated by either dragonflies or fish can be explained by the lack of effective antipredator behaviors against dragonflies and fish, respectively. Maximal growth rates did not differ among Lestes along the gradient. However, in the natural predator environment of vernal ponds (only conspecific cannibals), the vernal-pond Lestes had higher growth rates than the other Lestes suggesting that this excludes other Lestes from vernal ponds. Similarly, Lestes species that inhabit temporary ponds (i.e., ponds that dry intermittently every few years but not every year) had a higher growth rate than the fishless permanent-pond Lestes in the presence of the syntopic dragonfly predator. These growth differences among Lestes in predator treatments were not due to differences in food intake, but due to differences in physiology. The vernal-pond Lestes converted more assimilated food into body mass compared to the other Lestes in the presence of conspecific larvae, and the temporary-pond Lestes had a higher conversion efficiency than the fishless permanent-pond Lestes in the presence of the syntopic dragonfly predators. In contrast, reductions in growth rate within species in the presence of syntopic predators were both physiologically and behaviorally mediated. The interplay between behavior and physiology may be a common feature of the growth/predation-risk trade-off, and their joint study is therefore critical to mechanistically link phenotype, performance, and community assembly along the freshwater habitat gradient.