Coastal wetland plant communities are strongly structured by water depth and salinity. Rising sea level will cause changes in the hydro-period, surface water salinity and salt-water intrusion in coastal areas, which will reduce the distribution of forests in these areas. We studied the dynamics of a Pterocarpus officinalis stand in Puerto Rico over a 9-y period. We observed differences in plant growth, recruitment and mortality across a salinity gradient within a 1-ha plot. In areas of high salinity, recruitment, juvenile density and growth rates of juveniles and adults were lower. The detrimental effect of salinity was also observed in a growth experiment; seedlings in 5‰ and 10‰ salinity treatments had higher mortality, slower growth and less above- and below-ground biomass than control seedlings (0‰). In addition, an increase from 0 to 1‰ in salinity resulted in approximately 50% less nodulation in seedlings. Low recruitment in high salinity areas and lack of recruitment in adjacent grasslands will further reduce the distribution of this forest type. Although some ecosystems can respond to changing conditions by migration to more favourable areas, this is not the case with P. officinalis, and thus, restoration efforts are needed to re-establish this species where it occurred historically.