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In arid ecosystems, plant reproduction is strongly constrained by water availability, yet individuals within the same population can differ in reproductive output despite experiencing similar climatic conditions. Understanding how spatial variation in water availability translates into differences in growth and reproduction is essential for predicting population persistence under increasing aridity. We tested the hypothesis that spatial heterogeneity in soil water availability generates individual differences in cumulative water stress that influence physiological performance, growth, and flowering in Myrcianthes coquimbensis , an endangered shrub of the Atacama Desert. Over a 15-month period, we monitored soil water potential, predawn leaf water potential, photosynthesis, vegetative growth, and reproduction in a natural population, where individuals were classified based on recent reproductive history as annual-flowering or sporadic-flowering. Cumulative water stress during the growing season was quantified using the Water Stress Integral (WSI), which integrates the magnitude and duration of plant water deficit. Soil water availability was spatially heterogeneous, and this heterogeneity was reflected in consistent differences in plant water status among individuals. Although photosynthesis declined with decreasing plant water status in both reproductive groups, annual-flowering individuals maintained higher mean photosynthetic rates and experienced significantly lower WSI than sporadic-flowering plants. Higher WSI was associated with reduced relative growth rates and marginally lower annual growth. Flowering probability increased sharply as WSI became less negative and exceeded 50% at approximately −90 MPa, indicating a threshold-like relationship between cumulative stress and reproduction. These results show that spatial heterogeneity in soil water availability within a single population can generate individual differences in WSI that translate into nonlinear variation in growth and flowering. By integrating short-term physiological responses over time, WSI provides a mechanistic link between environmental variability and reproductive outcomes in dryland plants.