Psathyrostachys huashanica Keng is a perennial herb belongs to Gramineae and only distributes in Huashan area of Qinling Mountain, Shaanxi Province, China. At present, the amount of the population is much less than the past and suffers the risk of extinction. Owing to distributing limitation and importance as breeding material for germplasm storage, it has been listed into the first class of rare and endangered species of the nation and imperatively protected wild species in relation to crops. Drought is the major environmental stress limiting growth and yield of plants worldwide. Mean global temperature and evaporation rate are expected to rise over the next few decades and as a consequence the crop demand for water will increase. It is well known that inhibition of photosynthesis is one of the primary physiological consequences of drought stress. For this reason, the study of photosynthetic characteristics with related to drought stress is worthwhile in exploration of the acclimation and conservation of this endangered species. In the present paper, the response of photosynthetic characteristics to drought stress in P. huashanica Keng was studied by measuring growth parameters, gas-exchange, photosynthetic pigment contents, modulated chlorophyll fluorescence and malonaldehyde (MDA) contents under 3 different drought stresses in a pot experiment. The result exhibited that, when increasing drought stress, plant height, the width of leaf and photosynthetic pigment contents decreased and root length and MDA contents enhanced. Drought stress induced the decrease of net photosynthesis (P_N), stomatal conductance (g_s), ratio of transpiration (E), the maximum fluorescence (F_m), the electron transport rate (ETR) and photochemical quenching (q_P) and an increase of ratio of intercellular CO₂, intrinsic water use efficiency (WUE), the minimal fluorescence (F_o) and non-photochemical quenching (NPQ). Meanwhile, the maximum quantum yield of photo-system II (PSII) (F_v/F_m) kept invariable under drought stress. Besides, the fitted indexes from photo-response curves of P_N showed that photosynthesis and photosynthetic capacity were progressively reduced under drought conditions. As a consequence, lower light intensity is required to saturate photosynthesis. Under these conditions, plants cannot use all the excess of light energy for photosynthesis, increasing the susceptibility of plants to photoinhibition. In this experiment, photosystem II was injuried by severe drought, the quantum yield of photosystem II are significantly reduced by nonphysiologically low relative water contents when photoinhibition occurs, which may be the main cause restraining factors of photosynthesis. Electron transport is very resistant to drought and can remain unchanged during mild drought while it decreased when suffering severe drought stress. Summing up and obtains a conclusion, Gas-exchange data showed that the closure of stomata during drought stress, stomatal closure is one of the first responses to soil drying in Psathyrostachys huashanica Keng, and when drought stress increased, the photosynthetic apparatus was destroyed irreversible (Chlorophyll fluorescence parametres exhibited the functioning of the photosynthetic apparatus), and non-stomatal limitations may be the main inhibition of photosynthesis. Since Psathyrostachys huashanica Keng was distributed narrowly and disconnectedly and it's habitat is often on roadside or cliff or rock hollow (water deficit), namely quite rigorous, drought stress may be one of the main cause of the species endangered.