Seasonal drought is a common phenomenon in many forests predominated by monsoon climate. The impact of seasonal drought, however, may vary with elevations, and tree species of forests hence may differ in their response to elevations. In this study, we monitored the seasonal variation of seedling species composition, and their relative growth rate (RGR) along an elevational transect in tropical forests of southwest China for two years. We found tree seedling species richness declined with rising elevation. Seedling abundance and species richness increased significantly from dry season to rainy season. In dry season, RGR declined progressively from low to high elevational bands, while positive RGR occurred in each elevation in rainy season. We grouped seedling species into low and high elevation specialists based on their elevational distributions. Seasonal variance in soil moisture may lead to seasonal dynamics of seedling community in this area. Our results suggest that the observed change in local climate over the last 40 years tends to allow the tree species from high elevation to expand their distribution to the lower elevation, while the ranges of those at low elevations could be compressed or at the risk of extinction.