The Loess Plateau has been suffered from severe ecological degradations induced by the harsh environment and intensive human disturbances. Artificial vegetation rehabilitation, widely employed in the arid and semiarid regions, has been considered as an effective approach to restore the degraded ecosystems (e.g. to reduce water loss and soil erosion, land degradation and desertification). In view of the rigorous natural environment, the adaptability of plant species plays a vital role in the functioning of restored vegetation. Hippophae rhamnoides, an important eco-economic species in arid and semiarid regions, was wildly used in afforestation on the Loess Plateau. Despite its strong adaptability to drought condition and wide distribution, however, the low productivity is still a problem restricting its application. The micro-topography is the most important factor driving the reallocation of water and light, therefore, has a significant effect on the growth of plants. In this study we investigated the growth of Hippophae rhamnoides and distinguished the main environmental factors at different slope locations. Net photosynthesis rate ( P_n) was selected as an indicator of growth status. Diurnal changes of photosynthetic and environmental parameters of the species were determined by the Li-Cor 6400 at one-hour interval from 8:00am to 17:00pm in a typical watershed of loess hilly gully region. Direct and indirect effects of environmental factors on P_n were calculated through the path analysis. The results showed that: 1) There were significant interactions among four environmental factors: variation of photosynthetically active radiation ( PAR) triggered the fluctuations of air temperature (T_a). T_a was closely related to the air density, which had significant impacts on the air CO₂ concentration ( C_a) and air relative humidity ( RH). Environmental factors driven intrinsically by PAR superposed an integrative effect on P_n. The environmental changes at the upper, middle and lower slopes could explain 85.6%, 86.0% and 55.22% of the total variation of P_n, respectively. 2) P_n at the lower slope was the smallest with a daily average of 9.38μmol · m^-2 · s^-1, and those were 14.22 and 15.94μmol · m^-2 · s^-1 for the upper and middle slopes, respectively. 3) Water use efficiency ( WUE) of the upper and middle slopes was higher than that of the lower slope before 10:00am, although no significant differences were found in daily mean values. 4) At the upper slope, PAR and RH were the main environmental factors affecting P_n. In addition to PAR, interactions between T_a and RH had an important restrictively impact on P_n regardless of their small comprehensive effects at the middle slope. At the lower slope the P_n of Hippophae rhamnoides was constrained mainly by the PAR, and the direct path coefficient was 0.833, which substantially exceeded the direct path coefficients of other environmental factors. 5) P_n and WUE were the highest before 10:00 O'clock owing to high PAR, high RH and low T_a at that time. As a heliophyte species, Hippophae rhamnoides requires sufficient radiation to survive. The moderate water deficit was proved to be favorable for its effective use of water during photosynthesis. In this study, water stress at the upper and middle slopes was not supposed to be very severe in the study watershed where the mean annual precipitation is 535mm. The upper and middle slopes were therefore the optimum locations for Hippophae rhamnoides. This ensures Hippophae rhamnoides to make the utmost use of the high PAR and RH before 10:00 O'clock to conduct photosynthesis with high WUE. The results of this study provided scientific foundations for Hippophae rhamnoides plantation.