© 2015 NISC (Pty) Ltd. Selected tropical Acacia species are used extensively for short-rotation plantation forestry in many parts of Asia and, to a limited degree, in Australia. We explored leaf-level photosynthetic activity and leaf water potential (Ψleaf) of three field-grown Acacia tree species (aged between 7 and 18 months) in contrasting wet–dry tropical plantations in southern Vietnam and northern Australia. Light-saturated photosynthetic rate (A1500) declined throughout the morning and early afternoon in the dry season; in the wet season, levels remained high and relatively constant throughout most of the day. Maximum daily A1500 at 09:00 ranged from 22.2 μmol m−2 s−1 in the wet to 10.4 μmol m−2 s−1 in the dry season. At both locations, trees were able to extract soil water such that pre-dawn leaf water potential (Ψpd) remained>−1.5 MPa even at the end of the dry season. Stomatal conductance to water vapour (gs) did not respond to decreasing Ψleaf during the wet season but was sensitive to changes in Ψleaf in the dry season. Species comparisons of the relationships between A1500 and Ψleaf revealed different strategies to balance carbon uptake and water loss in a wet–dry environment. Acacia crassicarpa and A. mangium regulated Ψleaf to a greater extent than the A. mangium×A. auriculiformis hybrid such that ∆Ψleaf (determined as Ψpd−midday Ψleaf) was unaffected by season. This result suggests that the hydraulic regulation of tree water status varies amongst young tropical Acacia species. From a management perspective, for Acacia species that tend to strongly regulate water loss in environments with an extended dry season, overall productivity at the end of a rotation may be less than for species that prioritise carbon gain.