Tropical forests have highly diverse and often dense understorey vegetation. However, little is known about the demography of tropical understorey species and their response to common events like flooding and gap formation that change the prevailing environmental conditions. We studied the influence of flooding and canopy gaps on the demography of the widespread clonal herb Heliconia metallica in 16 populations in the Peruvian Amazon over two wet and two dry seasons. In a factorial study design, we selected several populations in canopy gaps and under a closed canopy both at flooded and non-flooded sites. Using periodic matrix models, we determined projected population growth rates during seasonal and annual time intervals and applied prospective and retrospective analyses to identify the life cycle components that contributed most to the differences in annual growth rates among the four combinations of habitat conditions. All populations increased in size during the wet and decreased during the dry season. In both years, projected annual growth rates of the non-flooded populations were less than 1 both in gaps and under a closed canopy. In contrast, over the 2-year study period growth rates of the flooded populations were close to 1 both in gaps and under a closed canopy. The life history of H. metallica was dominated by ramet survival and clonal growth, whereas seedling recruitment was very rare. In canopy gaps, growth and clonal expansion were rapid and reproduction was frequent, whereas under a closed canopy ramets grew little and rarely flowered. Population decline at non-flooded sites was due to higher ramet mortality during the dry season. However, the effects of flooding and canopy gaps interacted and affected life-history components differently in wet and dry seasons and in successive years. The intricate interacting effects of flooding and canopy gaps determine the population dynamics of the understorey herb H. metallica. The clonal life form and the plasticity of the ramets enable the populations to persist under variable light conditions, but may not be able to buffer the increasingly frequent periods of drought in Amazon forests.