Perennial plants are plastic organisms and can vary greatly in size within and between years. While much attention has been paid to the factors that maximize plant growth, plant shrinkage has been bluntly overlooked. Here we study anatomy, physiology, demography and comparative biology to understand how often plants shrink, mechanisms by which plants may internally regulate their architecture to shrink, and shrinkage’s demographic implications. We explored belowground resource uptake, hydraulic transport and demographic contributions of shrinkage of individuals of Cryptantha flava (Boraginaceae) in the Great Basin desert. We used a database with >700 species to explore shrinkage’s frequency and ecological consequences by examining demographic parameters such as population growth rate, longevity and reproductive output for species with and without shrinkage. We show that C. flava can forage the heterogeneous desert space by uptaking via some roots but not others, and that individuals become sectored with age (i.e., individual roots transport resources only to specific canopy regions). The switch in hydraulic design with ontogeny may explain why large individuals are more likely to shrink after droughts than juveniles. Perturbation analyses demonstrated that large individuals contribute very little to the population growth rate (λ) and that growth to large classes can negatively affect λ in C. flava. The comparative analyses indicated that shrinkage correlates positively with lifespan, survival, fecundity and growth. Finally, we found a significant number of candidate herbaceous species where shrinkage might be under selection because in them shrinking increases λ. We have linked anatomical traits, physiological mechanisms and population dynamics to offer a mechanistic explanation of how and why plants shrink. We argue that sectoriality in Cryptantha flava may allow individuals to minimize respiratory demands during harsh conditions by shedding sectors. Thus shrinkage, being preferable over mortality, is a survival mechanism that helps individuals buffer stochasticity. The finding that large individuals of C. flava contribute very little to λ in comparison to medium-sized individuals and that positive shrinkage vital-rate sensitivities occur frequently in the plant kingdom, together with recent demographic analytical developments, make exploring plant shrinkage a very promising venue of ecological and evolutionary research.