The importance of water use efficiency in crop productivity including oil palm is discussed. Effects of water stress in oil palm e.g. sex ratio and fresh fruit bunch yield are also emphasized. The importance of photosynthesis proses and its limitations are also included. This review also includes carbon partitioning, hormonal effects e.g. absicic acid (ABA) and nutrient uptakein plants. Some of the parameters studied through physiological response pertaining to water status in plants are technically discussed.