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The impacts of soil properties and fire regime on Neotropical savannas are well-known, but the importance of hydrological regime for plant species assembly has received less attention. Here, we assessed changes in diversity patterns of herbaceous and woody communities along a water table gradient in a fire-excluded Neotropical savanna. We found that increased waterlogging of soils was associated with declines in both herbaceous and woody species richness. Woody species richness decreased once the water table depth is less than 4 m and no woody species occurred once water table depth was less than 23 cm. Herbaceous communities remained species rich until the shallowest water table depth, where there is flooding at some point in the year, and even there, over a dozen species occurred. Woody species that occurred in areas with shallower water tables were a nested subset of those in areas with deeper water tables. In contrast, herbaceous communities showed turnover over the hydrological gradient, with distinct species specialized for different water table levels. However, we found that those specialists are restricted to few evolutionary lineages, evidenced by increased phylogenetic clustering over the water table gradient in herbaceous communities. We suggest that evolutionarily conserved hydrological niches define the herbaceous layer over the hydrological gradient, whereas only generalist woody species persist under high water tables. Our findings show that the effect of soil waterlogging differs between the herbaceous and woody layer of savannas, indicating that these communities will respond differently to shifts in the hydrological regime under future environmental change.