Models disagree on how to represent effects of drought stress on plant gas exchange. Some models assume drought stress affects the marginal water use efficiency of plants (marginal WUE. = ∂. A/∂. E; i.e. the change in photosynthesis per unit of change in transpiration) whereas others assume drought stress acts directly on photosynthetic capacity. We investigated drought stress in an analysis of results from 22 experimental data sets where photosynthesis, stomatal conductance and predawn leaf water potential were measured at increasing levels of water stress.Our analysis was framed by a recently developed stomatal model that reconciles the empirical and optimal approaches to predicting stomatal conductance. The model has single parameter g1, a decreasing function of marginal WUE. Species differed greatly in their estimated g1 values under moist conditions, and in the rate at which g1 declined with water stress. In some species, particularly the sclerophyll trees, g1 remained nearly constant or even increased.Photosynthesis was found almost universally to decrease more than could be explained by the reduction in g1, implying a decline in apparent carboxylation capacity (Vcmax). Species differed in the predawn water potential at which apparent Vcmax declined most steeply, and in the steepness of this decline. Principal components analysis revealed a gradient in water relation strategies from trees to herbs. Herbs had higher apparent Vcmax under moist conditions but trees tended to maintain more open stomata and higher apparent Vcmax under dry conditions. There was also a gradient from malacophylls to sclerophylls, with sclerophylls having lower g1 values under well-watered conditions and a lower sensitivity of apparent Vcmax to drought.Despite the limited amount of data available for this analysis, it is possible to draw some firm conclusions for modeling: (1) stomatal and non-stomatal limitations to photosynthesis must both be considered for the short-term response to drought and (2) plants adapted to arid climate respond very differently from others.