An investigation was made into the effects of long- and short-term water stress on the growth and water relations of species of Acacia belonging to four major sections of the subgenus Phyllodineae; the bipinnate-leaved Botrycephalae and the phyllodinous Juliflorae, Phyllodineae and Plurinerves. The germplasm was collected from sites within a narrow rainfall band [700–800 mm mean annual rainfall (m.a.r.)]. Shoot and root mass were significantly decreased in three of the four sections by water stress. The exception was the Juliflorae that showed a conservative growth strategy. A high root/shoot ratio is associated with tolerance to arid or semiarid environments, however, the highest root/shoot ratio was found for the temperate Botrycephalae. Measurements were made of the capacity for active and partial osmoregulation. All sections showed a biphasic response to drought stress for natural logarithm plots of relative water content (RWC) vs. osmotic potential in one or both experiments. This pattern of response has previously only been reported in a few plant species. Osmotic adjustment (OA) ranged from 1.6 MPa for the Botrycephalae to 3.4 MPa for Juliflorae at RWC of 60%. Active osmoregulation in the second phase was lower for the Botrycephalae and Phyllodineae than for the Juliflorae and Plurinerves. Although the germplasm was collected within a narrow and relatively high m.a.r. band, the sections with arid and semiarid relatives (Juliflorae and Plurinerves) still retained a higher degree of xeromorphic character and drought tolerance as determined by the growth responses and the higher capacity for OA.