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The bunchgrass grwoth form, which is very prominent in water-limited environments, can result in considerable self-shading of photosynthetically active foliage. The consequences of this growth form for light interception and water-use efficiency (photosynthesis/transpiration, P/T) were investigated for two Agropyron species which differ in tussock density and degree of self-shading. during the period of most active gas exchange, the tussocks were very compact and photosynthesis of shaded foliage was markedly light-limited. Stomatal control of older shaded foliage was poorly attuned for water-use efficiency. At low light, P/T decreased and intercellular CO2 concentrations increased. Despite differences in architecture and amount of shaded foliage, P/T of whole tussocks under ambient field conditions did not differ between these species. Partial defoliation decreased, rather than increased, P/T, primarily as a result of the poor photosynthetic light harvesting by the remaining foliage. Despite self-shading, the architecture of widely-spaced bunchgrasses provided for interception of as much direct bean solar radiation as is calculated for a rhisomatous grass occupying and area six-fold greater than the ground area underneath the camopy of these bunchgrasses.