Soil water content is a crucial factor for the growth of wetland plants. Its influence on germination and seedling growth of sweet flag (Acorus calamus) were studied by pot culture experiment and complete random design. The rhizomes with buds were cultured in small plastic basins. The soil thickness was 25 cm in each small plastic basin. Six soil samples with water content of 10%, 20%, 30%, 35%, 40% and 55%, respectively, were established and their water contents were maintained during the whole 60 days′ experimental period. Germination ratio, growth parameters of leaves and stems, pigment of leaves, photosynthetic fluorescence parameters of sweet flag were measured. The experimental results indicated: (1) Water content had significant effects on germination and seedlings growth of Sweet Flag. Germination ratio and average seedlings height under continuous drought condition were just one thirds of that under normal growth condition; (2) seedling height, leaf width, rhizome diameter, leaf number and leaf area reduced with the decreasing soil water content, but no obvious difference of leaf water content was observed; (3) In comparison with CK, the biomass of root, rhizome and leaf and total biomass of every treatment reduced to different extent on the 20^th, 40^th and 60^th day. With the increase of time, the biomass differences among the soils with different water contents were increased. Ratio of biomass among leaf, rhizome and root was 1: 1.59: 0.82 on average, indicating that biomass increase of rhizome is the largest, while that of root is the least.; (4) Chl a, chl b and carotenoid of seedlings leaf reduced, but chlorophyll a/chlorophyll b ratio increased with decrease of soil water content; (5) Fv/Fm and qP decreased with the increase of soil water content. Severe drought had obvious effects not only on Fm, but also on qN which decreased to different extent on day 45 and 60, indicating that the photosystem apparatus——PSⅡ was destroyed to different degree. Dramatic effects of drought stress on light curve of Sweet Flag were also observed, thus leading to the decrease of maximum ETR.