Low availability of soil moisture is considered a major limiting factor for plant growth and crop yield worldwide, and global change will likely aggravate water shortage and make water availability an even greater limitation to plant productivity across an increasing amount of land. The Chinese anise (Illicium lanceolatum), a traditional medicinal plant in China, has high content of shikimic acids which have effects of antiphlogosis and analgesis, and can reduce platelet aggregation and suppress vascular and cerebral thrombosis. Shikimic acid can also be an intermediate for antivirus and anticancer drugs. Scattering in its natural habitats, I.lanceolatum resources have experienced a rapid decline due to overexploitation. Therefore, it is necessary to study the protection and development strategies of I. lanceolatum resources. Until now, there is no study on the mechanism of this species responds to water and light conditions. In this paper, we reported the effects of drought stress on photosynthesis of varied ecotypes of Illicium lanceolatum. One year old potted seedlings of four ecotypes, respectively ecotypes from Linan Zhejiang (LA), Kaihua Zhejiang (KH), Wuning Jiangxi (WN) and Nanping Fujian (NP), were treated with different level of drought stress and their photosynthetic parameters were measured. The results showed that photosynthetic parameters differed significantly between the ecotypes during the drought stress and the recovery period. As the drought stress progressed, the light saturation points (LSP) and the light compensation point (LCP) declined for the four ecotypes. The maximum photosynthetic rate (P_max) increased initially and decreased rapidly later during the drought treatment period, however the relative changes in P_max induced by water stress differed from each other among the four ecotypes. The apparent photon quantum yield (AQY) increased as drought stress progressed. Significant differences in LSP, LCP, AQY and P_max, were found before and after water stress was released, but the margin of the difference was affected by the ecotypes. After rewatering, the LSPs of WN, KH and LA ecotypes increased, the LCP recovered rapidly, and AQY also remained at a high level. The P_max increased for KH and WN ecotypes, but decreased for LA and NP ecotypes after the water stress was released, implying a difference in the sensitivity to light intensity and water stress among the four ecotypes. The WN ecotype seedlings grew well in a wide range of light intensity and water conditions, presenting a good adaptability to various changing environments. NP ecotype was another one with higher adaptability to light and water stress. The KH and LA ecotypes from Zhejiang province exhibited stricter requirements for soil moisture content. The ecotypic differences existed in rates of recovery of photosynthesis during drought stress. Photosynthesis rate under drought stress was rapidly recovered until one day after re-watering only for WN ecotypes. The photosynthetic response curve also changed in response to drought stress. The light response of net photosynthetic rate (P_n) was affected by soil water content under low light intensity (≤200 μmol·m^-2·s^-1). However, the negative effect of light intensity exceeded that of water stress as the light intensified. Studies revealed synergistic effects of water stress and light intensity on the potential photosynthetic capacity of I.lanceolatum. The growth of I.lanceolatum requires an environment with adequate soil moisture as well as suitable light intensity. When soil water condition becomes poor, the light intensity should be reduced by shading or other measures, thus to reduce the negative impacts on plant growth. This study showed that the interaction of genetic background (ecotypes) and environmental factors (drought and light intensity) should be taken into consideration when introducing the plant species to different climate conditions, and developing water management shading strategy for high-efficiency intensive culture.