Abstract. The Tropical Niche Conservatism Hypothesis (TCH) tries to explain the generally observed latitudinal gradient of increasing species diversity towards the tropics. To date, few studies have used phylogenetic approaches to assess its validity, even though such methods are especially suited to detect changes in niche structure. We test the TCH using modeled distributions of 1898 woody species in Yunnan Province (southwest China) in combination with a family level phylogeny. Unlike predicted, species richness and phylogenetic diversity did not show a latitudinal gradient, but identified two high diversity zones, one in Northwest and one in South Yunnan. Despite this, the underlying residual phylogenetic diversity showed a clear decline away from the tropics, while the species composition became progressingly more phylogenetically clustered towards the North. These latitudinal changes were strongly associated with more extreme temperature variability and declining precipitation and soil water availability, especially during the dry season. Our results suggests that the climatically more extreme conditions outside the tropics require adaptations for successful colonization, most likely related to the plant hydraulic system, that have been acquired by only a limited number of phylogenetically closely related plant lineages. We emphasize the importance of phylogenetic approaches for testing the TCH.