Caragana species grow mainly in the arid and semi-arid areas of Asia and Europe. Geographically, the number of species declines with increasing precipitation and temperature, and increases with increasing altitude. They typically grow in grasslands or deserts, but are sometimes found in forests. The adaptation of these Caragana species to the climatic conditions of the desert has made them become dominant plants in the desert. In desert regions there are high temperatures, strong solar radiation and very little precipitation. Among these environmental factors, the growth and development of plants are most influenced by precipitation. What made these species become adaptive to the climate of a desert region? To answer this, the eaophysiological characteristics of four dominant Caragana species—— Caragana korshinskii, C. stenophylla, C. tibetica and C. roborovskyi, which grow in the desert area of the Inner Mongolia Plateau, were investigated. Leaf water content, the ratio of bound water to free water, leaf water potential and water-use efficiency of C. roborovsky were lowest among four Caragana species. The diurnal change of stomatal conductance of C. roborovskyi was different from that of the other species, and corresponded to the changes of daytime temperatures which were low on morning and afternoon, high during noon, and presented a single peak curve. Diurnal changes of transpiration rate of four dominant Caragana species were similar, and they all reached their maximum at 10:00 am, and then decreased gradually. The order for the daily cumulative value of transpiration was as follows: C. tibetica < C. roborovsky < C. korshinskii < C. stenophylla. Based on adaptations to water conditions of arid environment, C. korshinskii, C. stenophylla and C. tibetica to maintained good water status—— leaf water deficit was lower than 15％. While the C. roborovsky’s diurnal change range of leaf water deficit was much wider, its ability of keeping water was not as great as that of the other three Caragana species. Result from studies on the osmotic adjustment indicated that C. roborovsky had the lowest osmotic potential and highest leaf cytoplasm ion concentration. The lower the osmotic potential in the Caragana species, the more contribution of inorganic ions were to the total negative osmotic potential, which hinted these negative osmotic potential came from accumulation of inorganic ions. Results from studies on antioxidative enzyme systems and free radical content showed that activities of POD and SOD were highest in C. roborovskyi among the four species, while the activity of CAT kept similar between the four species. The order of free radical content was as follows: C. stenophylla > C. roborovskyi > C. korshinskii > C. tibetica. From these eaophysiological characters, we arrived at two main conclusions, as follows: (1) Adaptation strategy of C. roborovsky to drought was different from that of the other three species. C. korshinskii, C. tibetica and C. stenophylla were adaptable to arid environment through a greater ability of preserving water to keep water status stable, while C. roborovsky might rely on its lower osmotic potential and higher leaf cytoplasm ion concentration to supplement excess water consumption. C. roborovsky rely on greater ability of enduring variations in water conditions to adapt to its arid habitat too, and its fairly high activities of antioxidative enzymes might be one of the physiological bases for its stronger ability of endurance. (2) The low water retaining ability of Caragana species adjusted their cytoplasm osmotic potential mainly through accumulating inorganic ions, and thereby maintained water balance. This is probably an energy-saving adaptation strategy.