This paper quantifies wetland vegetation dynamics under drought, waterlogging, shading, and nutrient stresses within the coupled plant-soil-microbe system. A plant is characterized by three independent traits, namely leaf nitrogen (N) content, specific leaf area (SLA), and allometric carbon (C) allocation to rhizome storage, while plant growth is modelled through a dynamic plant allocation scheme. The modelling of N focuses on the internal cycle in which the aerobic and anaerobic processes are determined by the dynamics of oxygen controlled by plants, microbial aerobic processes, and hydrologic dynamics. The dynamics of water levels and soil moisture are described by a simple hydrologic model with stochastic rainfall and are decoupled from the plant-soil-microbe dynamics. Using the model to investigate the dynamics of sawgrass, the results, which are consistent with field observations in the southern Everglades, indicate that SLA decreases with increasing anaerobic condition. The lower SLA maintains high stomatal opening, while at the same time prevents cavitational collapse when sawgrass lowers its root:shoot ratio to reduce C cost in root anaerobic respiration. Given a naturally low but not too scarce level of phosphorus, net N mineralization is higher in the wetter hydrologic regimes because the increase in anaerobic decomposition and N mineralization compensate for the decline in those of aerobes; and the slower growing, more nitrogen efficient anaerobes compete less with plants for N. The optimal traits are the results of several counteracting trends of trade-offs in C and N economy differently influenced by trait combinations in different wetland environments. Copyright (C) 2010 John Wiley & Sons, Ltd.