The mechanisms of drought resistance in perennial legumes are poorly understood. We explored the diurnal and seasonal variation (May, August, February) in stomatal conductance (gs) and paraheliotropism of three tedera accessions (Bituminaria bituminosa (L.) C.H. Stirton var. albomarginata) and lucerne (Medicago sativa L.), both perennial legumes, grown in the field. For the tedera accessions, there was a significant reduction in gs during the day in May (late autumn) and February (summer), but there was little reduction for lucerne. The peak leaf angle in the tedera accessions ranged from <40° to 70°, whereas for lucerne, the leaf angle was nearly parallel to incident light at 85°. Leaf water-use efficiency, relative leaf water content and leaf retention were higher for the tedera accessions than for lucerne in February. These results highlight the superior drought resistance of tedera compared with lucerne. The reduction in gs over the day in tedera shows the capacity of this species to reduce water loss quickly when conditions for CO2 fixation relative to water loss are highly unfavourable. The high retention of leaves in summer by tedera is a valuable trait for a perennial pasture plant in Mediterranean environments. Leaf folding, combined with effective stomatal control in summer, provides tedera with a set of physiological responses that confer high drought resistance.