Recurrent droughts in Sri Lanka, now becoming increasingly frequent, cause substantial losses in coconut production. Consequently, the development of drought tolerant coconut varieties is an urgent need. Yield is the most reliable parameter to evaluate genotypes for drought tolerance but yieldbased evaluation is a complex and time consuming exercise with a perennial tree crop like coconut.With the objective of identifying drought tolerant varieties, 40 coconut forms or accessions (forms/acc) in the germplasm collection at Coconut Research Institute of Sri Lanka (CRISL) have been screened. This ongoing investigation gathered information on different types of parameters, and data on a wide range of physiological parameters of adult coconut palms, during an 81-day natural drought was available, along with soil moisture readings in the manure circle. Five contrasting forms/acc (Clovis, Kasagala, Dwarf Green, Cameroon Red Dwarf, and Dwarf x Tall hybrid DT), out of the forty screened, were selected for the present case study to explore the behaviour of some important physiological functions during a drought, their relationships, and the possibility of developing a method for rapid selection of putative drought tolerant coconut palms, based on easily measurable physiological parameters.The response to drought, in terms of physiological parameters, varied in the forms/acc selected for the case study. Clovis was identified as a putative drought tolerant form/acc as it maintained a high rate of photosynthesis and water use efficiency even at the end of the dry spell. Cameroon Red Dwarf was the most drought sensitive. Kasagala showed a degree of drought tolerance, oriented towards survival, with conservation and efficient use of available soil water. However, Kasagala is not likely to be viable as a commercial crop as its low photosynthetic rate due to low stomatal conductance is indicative of low potential productivity. Drought sensitivity 1 of DT was at an intermediate level. The assimilation rate of DT was 20% higher than the mean rate of other forms/acc up to mild levels of water stress, but declined sharply when soil moisture content decreased below 15%. However, it recovers very quickly on rewetting of the soil with the onset of rains, which enables it to maintain a high overall yield.The drop in coconut production when soil water is deficient is mainly due to limitations at the stomatal level rather than at the non-stomatal (biochemical) level of the assimilation process, especially in mild to moderate drought conditions. Screening for drought tolerance based on physiological parameters appears to be rapid and promising. Nevertheless, these procedures should be further verified with long-term yield data of more forms/acc before they are widely applied.