Nitrogen deficiency reduces the photosynthetic capacity of both C-3 and C-4 plants. The regulation of photosynthetic gas exchange in eight defies of the C-4 grass, sugarcane (Saccharum spp,), grown at three levels of M availability was studied to determine whether N stress diminishes the efficiency of the C-4 CO2 concentrating system in addition to reducing overall rates of photosynthesis. The quantum yield for CO, uptake decreased linearly with decreasing leaf N content. Genetic variation in quantum yield at a given level of N supply was also observed, Leaf tissue carbon isotope discrimination (Delta) increased linearly with decreasing quantum yield. Concurrent determinations of the prevailing ratio of intercellular to ambient partial pressure of CO2 (p(i)/p(a)) during leaf gas exchange suggested that the observed variation in Delta was almost entirely attributable to variation in bundle sheath leakiness to CO, (Phi) rather than p(i)/p(a), Taken together, these results point to substantial environmental and genetic variation in the efficiency of the CO, concentrating system in sugarcane. Reduced partitioning of carboxylase activity to ribulose-1,5-bisphosphate carboxylase activity relative to phosphoenolpyruvate carboxylase In N-deficient plants suggested that the associated increase in Qi and decline in quantum yield may have been attributable largely to a decline in C-4 cycle activity in the bundle sheath relative to C-4 cycle activity in the mesophyll. Quantum yield and intrinsic water use efficiency (WUE) were negatively correlated. In contrast with the trade-off between intrinsic light and water use efficiency, photosynthetic nitrogen-use efficiency correlated.