The relationships between physiological variables and sugarcane productivity under water deficit conditions were investigated in field studies during 2005 and 2006 in Weslaco, Texas, USA. A total of 78 genotypes and two commercial varieties were studied, one of which was drought-tolerant (TCP93-4245) and the other drought-sensitive (TCP87-3388). All genotypes were subjected to two irrigation regimes: a control well-watered treatment (wet) and a moderate water-deficit stress (dry) treatment for a period of 90 days. Maximum quantum efficiency of photosystem II (Fv/Fm), estimated chlorophyll content (SPAD index), leaf temperature (LT), leaf relative water content (RWC) and productivity were measured. The productivity of all genotypes was, on average, affected negatively; however, certain genotypes did not suffer significant reduction. Under water deficit, the productivity of the genotypes was positively and significantly correlated with Fv/Fm, SPAD index and RWC, while LT had a negative correlation. These findings suggest that genotypes exhibiting traits of high RWC values, high chlorophyll contents and high photosynthetic radiation use efficiency under low moisture availability should be targeted for selection and variety development in programmes aimed at improving sugarcane for drought prone environments.