Tetraena mongolica Maxim is an ancient relic plant distributed from Bayan Gele of western Inner Mongolia Autonomous Region to Shizui Mountain of eastern Ninxia Province. It is a narrowly monotypic genus of Zygophyllaceae and has a great value of plant genetic resources. In addition, T. mongolica play an important role in cropland windbreak construction, soil and water conservation and desert control in western China. However, due to environmental degradation caused by human activities during the past decades, its population declines rapidly and the plant community structure changes substantially. In order to gather information for promoting its regeneration and rejuvenation and restoring a healthy T. mongolica community, we conducted stump treatments on the plants. One transect was set up across the study area and a 20 m × 20 m sampling plot was marked at a interval of 20 m along the transect and a total of 5 plots were established. The plots included the treatments of stubble heights of 0, 5, 10, and 15 cm and a control. This study was conducted between March 2011 and July 2012 and we found that (1) Stumping can promote regeneration and rejuvenation of the plant T. mongolica during the first growing season after stumping. Both height growth and crown size increase of the plants at all stumping levels were significantly higher than the control (P < 0.01), with an increase of 241.4% of height and 417.2% of crown size under the stump treatment of 5 cm. Both basal diameter and branch length of the plants increased significantly comparing to the control (P < 0.01). The number of plant sprouts with the treatment of 5 cm was the largest (324), and the number of plant sprouts with treatments of 0, 10, and 15 cm and the control were 293, 229, 221 and 159 respectively; (2) The diurnal variation of net photosynthesis rate (Pn) and transpiration rate (Tr) of plants in the control fitted a bimodal curve. The diurnal variation of Pn and Tr of stumped plants fitted a single-peak curve in first growing season of July after stumping and then changed to a bimodal curve in the second growing season of July; (3) During the two growing seasons in July, both daily average values of plant Pn had the following order: 5 cm of stubble height > 15 cm > 10 cm > 0 cm > control. The values of Pn in 5 cm treatment in the first and the second growing seasons were 2.07 and 1.94 times the control; (4) Tr and water potential of plants with all the treatments had higher values than the control; and (5) Water use efficiency increased significantly in the two growing seasons after stumping, especially in the treatment of 5 cm which were 1.38 and 1.42 times the control. In our study, we found that the treatment of 5 cm stubble height was the best in term of improving plant growth, photosynthesis, water potential and other physiological indices. Higher Tr indicates that the stumped plants had higher resistance of drought and higher water potential of stumped plants indicates that the drought stress of T. mongolica could be lightened through stumping.