Abstract: To study effects of drought stress on growth and photosynthetic characteristics of Eucalyptus grandis saplings, a pot experiment kept under continuous drought was performed. Growth and photosynthetic parameters of the saplings were monitored once every two days after irrigation, that is, on D2, D4, D6, D8, D10, D12, D14 and D16, while the sampling with normal irrigation as DO. Results show that (1) during the first 6 days, although growth of the saplings in ground diameter and plant height declined, it did not differ much from that on D0 (P>0.05); however, with the stress going on(D8-D16), the growth of the saplings in ground diameter and plant height dropped significantly. (2) with the stress going on, the content of chlorophyll a (Chl a) in the saplings decreased significantly (P<0.05), whereas chlorophyll a/ chlorophyll b ratio(Chl a/b) followed a risingandthenfalling trend, and the content of Chlorophyll b and carotenoids on D2 did not change much from their respective ones on D0 (P>0.05), but were getting much lower from D4 than those on D0(P<0.05); (3) with the stress going on, net photosynthetic rate (P_n), transpiration rate (T_r), stomatal conductance (G_s) of the saplings decreased significantly (P<0.05)while intercellular CO₂ concentration (C_i) decreased first and then increased; (4) with the stress going on, apparent quantum yield(Y_AQ), RuBP apparent carboxylation rate (E_c), light saturation point(L_sp) and CO₂ saturation point(C_sp) of the saplings were all on declining trends, while light compensation point(L_cp), CO₂ compensation point(C_cp) on rising ones and maximum net photosyntheticrate(P_max)was on a declining one. In summary, with the drought stress aggravating, the content of photosynthetic pigments in the saplings decreased; stomata closed partly; photosynthetic organs were damaged to some extent, thus greatly reducing the saplings′ ability to use light and CO₂ and their photosynthetic rate, and consequently suppressing growth of the E. grandis saplings.