Introduction. Vegetative and fruit growth in fruit trees are differentially sensitive to water deficit during the season depending on the stage of fruit growth. Attempts have been made to evaluate the possibilities of using regulated deficit irrigation to control vegetative growth and save water in the fruit industry. Materials and methods. Effects of water stress (WS) and crop load (CL) on fruit growth and carbon assimilation rates were evaluated in a 7-year-old ‘Elegant Lady’ peach orchard. A completely randomized block design with 2 × 3 factors [irrigation with two levels (control and WS) and CL with three levels (light, commercial and heavy)] was used. Results and discussion. Both WS and CL affected fruit growth during the last stages but not early on. CL did not affect trunk water potential which was, however, significantly reduced by WS throughout the day and the season. Trunk water potential of water-stressed trees was lower than that of control trees throughout the day and the season regardless of CL. The magnitude of WS increased as the season progressed. Stomatal conductance, transpiration rate and CO2 assimilation rate were not affected by CL but were reduced by WS. The trees responded (acclimated) to stress by progressively reducing their transpiration rate as the severity of stress increased. For each irrigation regime, assimilation rates were similar for all three crop levels. This indicated the existence of alternate sinks for assimilates when CL was low, which compensate for the reduction of fruit sink activity resulting from fruit thinning. Conclusion. Water deficit reduced trunk water potential, stomatal conductance, transpiration and photosynthesis in ‘Elegant Lady’ peach trees. However, CL had a limited effect on these functions. There were good correlations between trunk water potential and either stomatal conductance or assimilation rate in water-stressed trees but not in control trees. This indicates a poor coordination between leaf functions in peach trees under optimal conditions. However, these relationships were stronger under WS conditions. Thus, water use efficiency appeared to increase under water deficit conditions.