Abstract: Photosynthesis of Artemisia intramongolica leaves and communities were studied at different developing stages. The diurnal course of photosynthetic rates of leaves and communities changed with climate conditions, with the instantaneous photosynthetic rate depending logistically on PAR (Photosynthetically active radiation). Low soil moisture content greatly depressed light use capacity of plant leaves and communities. On clear days photosynthetic rates mainly depended on air temperature and humidity under favorable soil water condition. Low mid-day air humidity was the critical environmental factor in observed contributing to “mid-day depression” of photosynthesis. The transpiration rate of leaves was linearly correlated with air temperature. Moreover, the light use efficiency (LUE) and water use efficiency (WUE) of plants were both closely associated with PAR and air temperatures in a negative linear relationship. A. intramongolica maintained relatively high CO2 fixation capability under dry soil and high air temperature conditions, though, once soil water content increased, photosynthetic rate and biomass were observed to also increase greatly. These results suggested that the photosynthetic strategy of A. intramongolica is adapted to the conditions of sandy soils in the semi-arid regions where it occurs through its ability to maintaining a certain degree of LUE for a long time under water stress and high temperature and then to resume high photosynthetic rate when soil moisture status improves. It competitively inhibits other species through its high water harvesting capacity and its high transpiration rate.