The tropical dry forests of central India are drought-prone communities that experience frequent wildfire and anthropogenic disturbances due to agricultural activity. We analysed patterns in the species diversity and phylogenetic structure of 117 tree species assemblages distributed across a ~230 m to ~940 m elevational gradient within the Central Indian state of Madhya Pradesh. We explore how these axes of diversity varied with elevation, precipitation, temperature, and climatic stress and infer possible assembly structuring mechanisms. Species richness, phylogenetic diversity (PD), and basal area were all positively correlated with elevation, which trended towards cooler temperatures, higher precipitation, and lower Chave’s E—a measure of environmental stress that compounds temperature and precipitation variability with drought intensity. High elevation assemblages tended to be phylogenetically dispersed, while the strength of dispersion diminished as plots became drier and more stressful (Chave’s E). Phylogenetic turnover was strongest across gradients in elevation, followed by stress and precipitation. Our findings indicate that precipitation deficits along with increased temperature and precipitation seasonality at low elevations may act as a selective filter on plant lineages by imposing physiological constraints on species. High elevation sites may thus provide a refuge for tree species maladapted to the harsh drought conditions present throughout low elevations in the Central Indian landscape. We suggest that high elevation habitats may become increasingly important as refugia for species if current climate warming trends continue.