Agriophyllum squarrosum is an annual psammophyte species and wildly distributed in all deserts and sand lands in China. Changes of plant height, survival rate, photosynthetic rate (Pn), transpiration rate (Tr), stomatal conductance (Gs) and water use efficiency (WUE) of A. squarrosum seedlings was measured in a sand burial experiment during 2010-2011 in Horqin Sand Land of Inner Mongolia to understand effect of sand burial on the growth, photosynthesis and transpiration of annual psammophyte seedlings. The experiment included ten burial treatments: buried to 0% (CK, no burial), 25% (A), 50% (B), 75% (C), 100% (D), 133% (E), 166% (F), 200% (G), 233% (H) and 266%(I) of seedling height. The results showed that A. squarrosum had a strong ability to withstand sand burial. The survival rate and the plant height of A. squarrosum seedlings increased significantly at 25% burial depth of the seedling height. When subjected to sand burial at 50%-100%, the difference was not significant between the sand-buried treatments and the none-sand buried CK although the plant height and the survival rate decreased. The survival rate and the plant height decreased significantly only when the burial depth exceeded the height of the seedlings, but some individuals still kept survived when the burial depth was 266% of the seedling height. Buried by sand to the fifth day, the photosynthesis rate of A. squarrosum seedlings decreased slowly, the transpiration rate and the stomatal conductance and the water use efficiency fluctuated greatly with the increase of sand burial depth. The photosynthesis rate and the water use efficiency decreased by 14.6% and 19.2%, and the transpiration rate, the stomatal conductance increased by 3.0% and 3.7% in the I treatment than that in the CK, respectively. With the prolongation of sand burial time, the photosynthesis rate, the transpiration rate and the stomatal conductance decreased significantly, but the water use efficiency was still fluctuated with increase of sand burial depth. Buried in sand to the tenth day, the photosynthesis rate, the transpiration rate, the stomatal conductance and the water use efficiency decreased by 89.7%, 84.4%, 85.7% and 54.0% in the I treatment than that in the CK, respectively. Buried in sand to the fifteenth day, the photosynthesis rate, the transpiration rate, the stomatal conductance and the water use efficiency decreased by 86.7%, 90.0%, 89.0% and 4.2% in the I treatment than that in the CK, respectively. Correlation analysis suggested that the survival rate and the seedling height had significant and positive correlations with the photosynthesis rate, the transpiration rate, the stomatal conductance and the water use efficiency. There were significant positive correlations among the photosynthesis rate, the transpiration rate and the stomatal conductance, but the correlation was not significant between them and the water use efficiency. It was concluded that sustained severe burial by sand had a significant damage to survival and growth of A. squarrosum seedlings. The decrease of the survival rate and the plant height in A. squarrosum seedlings were resulted not only from emergence difficult and decrease of photosynthetic area under sand burial stress, but also from decrease of the photosynthetic rate, the transpiration rate and the stomatal conductance.