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Forest–savanna boundaries are ecotones that support complex ecosystem functions and are sensitive to biotic/abiotic perturbations. What drives their distribution today and how it may shift in the future are open questions. Feedbacks among climate, fire, herbivory, and land use are known drivers. Here, we show that alternating seasonal drought and waterlogging stress favors the dominance of savanna-like ecosystems over forests. We track the seasonal water-table depth as an indicator of water stress when too deep and oxygen stress when too shallow and map forest/savanna occurrence within this double-stress space in the neotropics. We find that under a given annual precipitation, savannas are favored in landscape positions experiencing double stress, which is more common as the dry season strengthens (climate driver) but only found in waterlogged lowlands (terrain driver). We further show that hydrological changes at the end of the century may expose some flooded forests to savanna expansion, affecting biodiversity and soil carbon storage. Our results highlight the importance of land hydrology in understanding/predicting forest–savanna transitions in a changing world.