Changes in photochemical activity induced by water deficit were investigated in Talinum triangulare, an inducible CAM plant. The aim was to analyse the interactions between C3 photosynthesis, induction and activity of CAM, photosynthetic energy regulation and the mechanisms responsible for photoprotection and photoinhibition under water stress. Gas exchange, chlorophyll a fluorescence, titratable acidity, carotenoid composition and relative contents of the PSII reaction centre protein (D1) were measured. A decrease in xylem tension (psi) from -0.14 to -0.2 MPa substantially decreased daytime net CO2 assimilation and daily carbon gain, and induced CAM, as shown by CO2 assimilation during the night and changes in titratable acidity; a further decrease in psi decreased nocturnal acid accumulation by 60%. Non-photochemical quenching of chlorophyll a fluorescence (NPQ) increased with water deficit, but decreased with a more severe drought (psi below -0.2 MPa), when CAM activity was low. NPQ was lower at 0900 h (during maximum decarboxylation rates) than at 1400 h, when malate pools were depleted. Down-regulation of PSII activity related to the rise in NPQ was indicated by a smaller quantum yield of PSII photochemistry (phiPSII) in droughted compared with watered plants. However, phiPSII was larger at 0900 h than at 1400 h. The de-epoxidation state of the xanthophyll cycle increased with drought and was linearly related to NPQ. Intrinsic quantum yield of PSII (FV/FM) measured at dusk was also lower in severely stressed plants than in controls. Under maximum photosynthetic photon flux and high decarboxylation rates of organic acids, the D1 content in leaves of droughted plants showing maximal CAM activity was identical to the controls; increased drought decreased D1 content by more than 30%. Predawn samples had D1 contents similar to leaves sampled at peak irradiance, with no signs of recovery after 12 h of darkness. It is concluded that under mild water stress, early induction of CAM, together with an increased energy dissipation by the xanthophyll cycle, prevents net degradation of D1 protein; when water deficit is more severe, CAM and xanthophyll cycle capacities for energy dissipation decline, and net degradation of D1 proceeds.