Decreasing relative water content (RWC) of leaves progressively decreases stomatal conductance (gs), slowing CO2 assimilation (A) which eventually stops, after which CO2 is evolved. In some studies, photosynthetic potential (Apot), measured under saturating CO2, is unaffected by a small loss of RWC but becomes progressively more inhibited, and less stimulated by elevated CO2, below a threshold RWC (Type 1 response). In other studies, Apot and the stimulation of A by elevated CO2 decreases progressively as RWC falls (Type 2 response). Decreased Apot is caused by impaired metabolism. Consequently, as RWC declines, the relative limitation of A by g(s) decreases, and metabolic limitation increases. Causes of decreased Apot are considered. Limitation of ribulose bisphosphate (RuBP) synthesis is the likely cause of decreased Apot at low RWC, not inhibition or loss of photosynthetic carbon reduction cycle enzymes, including RuBP carboxylase/oxygenase (Rubisco). Limitation of RuBP synthesis is probably caused by inhibition of ATP synthesis, due to progressive inactivation or loss of Coupling Factor resulting from increasing ionic (Mg2+) concentration, not to reduced capacity for electron or proton transport, or inadequate trans-thylakoid proton gradient (ApH). Inhibition of Apot by accumulation of assimilates or inadequate inorganic phosphate is not considered significant. Decreased ATP content and imbalance with reductant status affect cell metabolism substantially: possible consequences are discussed with reference to accumulation of amino acids and alterations in protein complement under water stress.