The ecological effects of Chinese tallowtree are well documented in the southeastern United States, yet this known invasive plant continues to be planted extensively in California's Central Valley, where it has recently naturalized in several locations. Climate modeling suggests that most of California's lowland riparian habitat is susceptible to invasion by Chinese tallowtree; however, no field tests are available to corroborate this result for California or to identify local environmental constraints that might limit potential habitats. We used observational and experimental methods to evaluate invasion potential of Chinese tallowtree in riparian habitats in California's Central Valley. High invasion potential, indicated by an intersection of the maxima of dispersal probability, germination, and survivorship of seedlings, occurred at low elevations immediately next to perennial waters. The main factor limiting Chinese tallowtree invasion potential in more elevated habitats appears to be lack of seedling drought tolerance. These findings suggest that California's riparian habitats are vulnerable to invasion by Chinese tallowtree, especially downstream of current naturalized populations where water or bird dispersal will deposit seeds in environments ideal for germination and growth.