Carbon isotope discrimination (DELTA) has been proposed as a criterion in selecting for water-use efficiency (WUE) in C3 crop species. This study was conducted to determine associations among DELTA, leaf instantaneous WUE (WUE(i)), and shoot WUE (WUE(s)) in clones of crested wheatgrass [Agropyron desertorum (Fischer ex Link) Schultes] previously selected for low, medium, and high DELTA. Nine clones (three in each DELTA class) were grown in a greenhouse in pots weighted every third day and brought to either 0.03 or 0.12 kg kg-1 gravimetric water content. Leaf gas exchange rates and water potentials were determined at 2-wk intervals until plant harvest at 12 wk. Under drought, the ranking of DELTA classes for stomatal conductance agreed with previous and present DELTA classifications, and midday leaf water potentials averaged almost-equal-to 0.4 MPa lower in the low than in the medium or high DELTA class. Shoot dry weight and DELTA decreased with drought and were correlated positively under well-watered conditions (r = 0.77*, df = 7, P < 0.05), but not under drought. Although DELTA and leaf intercellular CO2 concentration of individual clones were correlated positively at each water level, the expected differences between DELTA classes in DELTA, WUE(i), and WUE(s) were obtained only under drought. A lower DELTA in low than high DELTA class under drought was associated with greater shoot dry weight, WUE(s), and WUE(i). Across water levels, large negative correlations were found between DELTA and WUE(i) (r = -0.95**, df = 16, P < 0.01) or WUE(s) (r = -0.89**, df = 16). These results indicate that selection for low carbon isotope discrimination will improve water-use efficiency in crested wheat-grass under drought.