Independent and interactive effects of atmospheric CO2 enrichment and drought stress on leaf conductance, photosynthetic performance, transpiration and water-use efficiency in 2-year-old Alnus firma, a common pioneer tree species, were assessed. Measurements were conducted in a controlled environment laboratory at three CO2 concentrations [350 (ambient), 600 and 900 (enrichment) mu mol mol(-1)] and combined with five water regimes [leaf water potential of higher than -0.3 (well-watered), -0.5 and -0.8 (moderate drought), -1.0 and lower than -1.2 (serious drought stress) MPa]. Under well-watered conditions, rates of net photosynthesis significantly (P<0.01) increased with increasing CO2 concentrations; leaf conductance significantly decreased. With drought stress established, leaf conductance, photosynthesis and transpiration decreased. However, leaf water-use efficiency increased with drought stress, with potential transpiration affected sooner than potential photosynthesis. The combined effects of COP enrichment and drought stress on water-use efficiency were significant in that the result of net photosynthesis was stimulated while transpiration in CO2 enriched plants resembled that of unenriched plants under conditions of drought stress. The results presented here suggest that if a doubling of atmospheric COP concentration occurs by the mid-21st Century, then the photosynthetic rate of A. firma in drought-affected regions may be expected to increase. A reduction in total water use, however, is not indicated.