SUMMARYSedum telephium is a succulent plant in which CAM-cycling is rapidly induced or enhanced in response to drought stress. Diel measurements of leaf malate content and gas exchange demonstrate that as drought stress increased, daytime uptake of COg declined and less respiratory COg was lost at night as a result of re-fixation by phosphoenolpyruvate carboxylase (PEPC) with subsequent accumulation of malate. The enhancement of CAMcycling in response to drought stress under high and low photon flux density (PFD) results in up to fourfold increases in daily water use efficiency. Moreover, potential conservation of water resulting from CAM-cycling varied from 4 to 77 °o of total daytime transpiration, depending on PFD and severity of drought. Measurements of instantaneous C-isotope discrimination demonstrated the activation of PEPC activity in vivo with a minimal direct contribution from C^ carboxylation to net COg uptake during the day. The d^^C composition of carbohydrates and organic acids indicated that products of malate breakdown are preferentially directed towards starch during the day, which subsequently supplies phosphoenolpyruvate (PEP) for the dark reactions of CAM. The data are summarized using a model which quantitatively describes the source of carbon in the leaf during the day (Cg or C^) and the partitioning of this carbon betw-een the generation of substrate for CAM, production of respiratory CO2 or export. The resulting carbon budgets illustrate that the breakdown of starch at night increases up to twofold with severe drought stress, whilst the flux of carbon into starch during the day is maintained or even increased, largely at the expense of the soluble sugar pool. Overall, under high PED the enhancement of CAMcycling permits continued growth under conditions of severe drought, albeit at a reduced rate. However, under low PED, the induction of CAM-cycling serves mainly as a maintenance mechanism whereby water is conserved and a positive carbon balance is preserved by recycling carbon skeletons at the expense of growth during periods of severe water shortage.