To thrive in the forest environment a species must be able to pass each of three filters: first it must reach a site (the historical filter), then it must be able to tolerate the physical environment (the physiological filter) and finally it must be able to cope with biotic interactions at the site (the biotic filter). This thesis comprises of two complementary studies that explore the role temperature gradients play in determining a species ability to pass the physiological and biotic filters of a temperate rainforest. These studies were conducted using the seedlings of New Zealand warm- and cool- temperate tree species. The first study addresses how the trade-off in shade tolerance vs. growth rate found throughout closed-canopy forests changes from warm-temperate to cool-temperate environments using a transplant experiment. The second study aims to determine the implications of climate-related variation in xylem anatomy for morphological and physiological traits related to competitive ability. Warm-temperate species were found to be both faster-growing and more shade-tolerant than the cool-temperate species, indicating that cold resistant traits reduce competitive ability in warmer environments. This was supported by findings that the warm-temperate species had more conductive xylem and correspondingly higher levels of leaf area deployed than the cool species, indicating that cold resistance indirectly reduces the leafiness of a species. These cool-temperate species with less leaf surface area are less effective at intercepting light, resulting in lower growth rates and reduced shade tolerance which are important components of competitive ability in tree species. This may explain their absence from warmer forest environments, and their restriction to colder environments.