This study examined the mode of photosynthesis (C3 or C4), daily and seasonal patterns of xylem water potential, seasonal patterns of field photosynthesis, and the laboratory gas exchange characterisitcs of plants which grow on or in the vicinity of Eureka Dunes, Inyo County, California. The perennial duneendemic Swallenia alexandrae was found to possess the C4 pathway while all other taxa surveyed were C3. Plants which grew on the dunes exhibited: 1) significantly less negative xylem water potentials, 2) dampened seasonal changes in predawn water potentials, and 3) smaller seasonal amplitudes of water potential than plants of the adjoining flats. The minimum water potentials experienced by Swallenia during the hot summer months were a third of those endured by adjacent non-dune Larrea. Non-endemics growing on the dune had more negative xylem water potentals than dune endemics, but still never approached the low values of non-dune plants. The poor moisture retention properties of sand may have selected for moisture-conserving traits (stomatal closure at relatively high water potentials, high water use efficiency) rather than moisture-expending ones (osmoregulation, high leaf conductances) in the endemic perennials. Field measurements of photosynthesis showed that dune-restricted (but not necessarily endemic) plants had high photosynthetic capacities and sustained summer carbon assimilation, the latter being protracted months beyond the last pulse of precipitation. The C3 annual Dicoria canescens ssp. clarkae maintained photosynthetic rates well exceeding those of the C4 Swallenia throughout the summer and may represent a previously undescribed physiological life form in desert plants. Laboratory measurements supplemented the field data and compared the water use efficiencies of two dune endemics. It is suggested that high photosynthetic productivity, high water use efficiency, and carbon allocation to the longitudinal growth of roots and shoots are important physiological adaptations to shifting sand and substrate moisture depletion at Eureka Dunes.