Field and pot experiments were conducted to investigate the effects of defoliation on crop performance and the possibility of using defoliation as a method for conserving soil moisture. The study was conducted during 2006–2008, over two growing seasons of winter wheat (Triticum aestivum L.) in the North China Plain. Three levels of defoliation (mild, moderate and severe) were imposed on winter wheat in the field during the following crop phases and conditions: at heading, at anthesis under water deficit conditions and at anthesis under two or three levels of irrigation. Additional pot experiments with three levels of defoliation under two water regimes were arranged. The results showed that both the intensity of defoliation and the timing of defoliation significantly reduced grain production. Under wet conditions the reduction was over 20%, while under dry conditions the reduction was c. 12%. Yield reduction was greater for defoliation at heading than at anthesis and it was mainly caused by a reduction in kernel weight. Mild defoliation (top three leaves retained) did not affect grain yield. Moderate defoliation (top two leaves retained) slightly reduced grain production. Root length density in the topsoil profile was significantly reduced by severe defoliation at anthesis under wet conditions, but it increased under dry conditions. Dry matter remobilization to grains under moderate and mild defoliation was increased and resulted in a relatively higher harvest index (HI). The photosynthetic rate of the leaves remaining after defoliation was enhanced under all soil moisture conditions. Although defoliation reduced the seasonal water use (ET), the yield reduction was much greater than the reduction in ET under severe defoliation, resulting in lower water use efficiency (WUE). The results show that conserving soil moisture by removing leaves might not be an economic choice. Under the conditions of the present study, the WUE of winter wheat was not improved by defoliation; however, in very dry conditions the reduction in ET by defoliation might help the crop survive.