The effect of water stress during summer and recovery after rain on herbage accumulation, leaf growth components, stomatal conductance and leaf water relations of white clover (Trifolium repens cv. Haifa) and phalaris (Phalaris aquatica cv. Australian Commercial) was studied in an established mixed pasture under dryland (dry) or irrigated (wet) conditions. Soil water deficits under dry conditions reached 150 mm and soil water potentials in the top 20 cm declined to nearly -2 MPa after 50 days of dry weather. Water stress severely restricted growth of both species but then after rain fell, white clover growth rates exceeded those of phalaris. Under irrigation, white clover produced twice the herbage mass of phalaris but under dry conditions herbage production was similar from both species. Leaf appearance rates per tiller or stolon were slightly higher for white clover than phalaris but were reduced by 20% under water stress in both species. Leaf or petiole extension rates were more sensitive to water stress than leaf appearance rates and declined by 75% in phalaris and 90% in white clover. The ratio of leaf or petiole extension rates on dry/wet treatments was similar for both species in relation to leaf relative water contents, but in relation to leaf water potentials phalaris maintained higher leaf growth rates. Phalaris maintained a higher leaf relative water content in relation to leaf water potentials than did white clover and also maintained higher leaf water potentials in relation to the soil water potential in the top 20 cm. Stomata1 conductances for both species declined by 80-90% with increasing water stress, and both species showed similar stomatal responses to bulk leaf water potentials and leaf relative water contents. It is suggested that the poorer performance of white clover under water stress may be due principally to a shallower root system than phalaris and not due to any underlying major physiological differences. The white clover cultivar used in this study came from the mediterranean region and showed some different responses to water stress than previously published evidence on white clover. This suggests genetic variation in responses to water stress may exist within white clover. To maintain white clover in a pasture under dry conditions it is suggested that grazing practices aim to retain a high proportion of growing points.