Abstract: The effect of four different water supply levels on the gas exchange processes and photochemical efficiency in PS Ⅱ were investigated in seedlings of Salix psammophila, a dominant shrub in the Maowusu arid sandy region. Increasing water supply levels had a strong influence on diurnal changes in photosynthetic rate, transpiration rate, stomatal conductance, intercellular CO2 concentration (all increasing ) and leaf temperature (decreasing) of the seedlings. The photosynthetic rate of seedlings showed a strong midday depression under low water supply but not under full water supply. Increasing water supply decreased the light compensation point and enhanced the saturation light and apparent quanta efficiency. Water supply significantly influenced photochemical efficiency in PS Ⅱ: maximal fluorescence, variable fluorescence, maximal fluorescence ratio and maximal photochemical efficiency all decreased with declining water supply. Correlation analysis showed that meteorological variables, such as photosynthetic active radiation, air temperature, air saturated water vapour pressure difference, and physiological variables, such as stomatal conductance, leaf temperature, intercellular CO2 concentration, significantly affected the photosynthetic rates of the seedlings under varying water supply conditions.