Variation in osmotic adjustment (OA) among chickpea (Cicer arietinum L.) cultivars has been observed when exposed to terminal drought, but some studies suggest that this benefits yield while others suggest it does not benefit yield in water-limited environments. In the present study, parents differing in OA were crossed and a set of advanced breeding lines (ABLs) developed for yield testing. The variation in OA during podding was measured under terminal drought in the F-2, F-3, F-7, and F-8 progeny and in the parents by either rehydrating the leaves before sampling for osmotic potential (OP) or by measuring the relative water content (RWC) and OP on adjacent leaves for the calculation of the OP at full turgor. Yields were measured in the F-8 progeny under terminal drought in Australia and India. While differences in OA were measured in the chickpea lines and parents, OA varied from year to year and did not consistently benefit yield when measured in the field under terminal drought. In Australia, differences in OA were not associated with any yield benefit in any year, while in India early flowering resulted in higher yields at three of the four sites, and OA had an inconsistent effect on seed yields. A comparison of OP at full turgor measured after rehydration and from measurements of RWC and OP showed that the rehydration technique underestimated OA. The lack of contribution of OA to yield of chickpea is discussed.