One of the largest remnants of tropical dry forest is the South American Gran Chaco. A quarter of this biome is in Paraguay, but there have been few studies in the Paraguayan Chaco. The Gran Chaco flora is diverse in structure, function, composition and phenology. Fundamental ecological questions remain in this biome, such as what bioclimatic factors shape the Chaco’s composition, structure and phenology. In this study, we integrated forest inventories from permanent plots with monthly high-resolution NDVI from PlanetScope and historical climate data from WorldClim to identify bioclimatic predictors of forest structure, composition and phenology. We found that bioclimatic variables related to precipitation were correlated with stem density and Pielou evenness index, while temperature-related variables correlated with basal area. The best predictor of forest phenology (NDVI variation) was precipitation lagged by 1 month followed by temperature lagged by 2 months. In the period with most water stress, the phenological response correlates with diversity, height and basal area, showing links with dominance and tree size. Our results indicate that even if the ecology and function of Dry Chaco Forest is characterised by water limitation, temperature has a moderating effect by limiting growth and influencing leaf flush and deciduousness.