Gas exchange was measured in a forest plantation dominated by Fraxinus angustifolia Vahl. and Quercus robur L. in northern Italy, over three growing seasons that differed in water availability (2001, 2002 and 2003). The objectives were to: (1) determine variability in the photosynthetic parameters V(cmax) (maximum carboxylation capacity) and J(max) (maximum rate of electron transport) in relation to species, leaf ontogeny and drought; and (2) assess the potential of the photosynthesis-nitrogen relationship for estimating leaf photosynthetic capacity. Marked seasonal and interannual variability in photosynthetic capacity was observed, primarily caused by changes in leaf ontogeny and water stress. Relatively small differences were apparent between species. In the absence of water stress (year 2002), the seasonal patterns of V(cmax) and J(max) were characterized by a rapid increase during spring, a relatively steady state during summer and a rapid decline during autumn. In years with a moderate (year 2001) or a severe (year 2003) water stress, photosynthetic capacity decreased during the summer in proportion to drought intensity, without a parallel decline in leaf nitrogen content. The V(cmax)-nitrogen relationship was significantly affected by both leaf ontogeny and drought. As a consequence, the use of a single annual regression to predict V(cmax) from leaf nitrogen yielded good estimates only during the summer and in the absence of water stress. Irrespective of the mechanisms by which photosynthetic capacity is affected by water stress, its large seasonal and interannual variability is of great relevance for modeling the forest carbon cycle.