In arid and semi-arid regions, the fact that crops suffering water deficit is unavoidable. Many studies indicated that plants have an ability to compensate the adverse effect of drought when the drought is moderate. But, how the compensation effects take place, and what are the physiological and biochemical mechanisms? This paper summarized the types, mechanisms and conditions of compensation effect that crops have under water deficit. The compensation effect is classified into growth compensation, physiological and biochemical compensation, and metabolism and output compensation. The biochemical and molecular mechanisms were discussed in terms of osmotic adjustment and dehydrate protection, and the biological basis of compensation effect was also elucidated. Finally, the direction for further study is pointed out.