Abstract Wheat reduced height ( Rht ) genes encode modified DELLA proteins, which are gibberellin insensitive, accumulate under stress, restrain growth and affect plant stress response. The seedling reaction to soil water deficit regarding leaf gas exchange and chlorophyll fluorescence was compared in near‐isogenic lines carrying the alleles Rht‐B1a (tall), Rht‐B1b (semi‐dwarfing) and Rht‐B1c (dwarfing) and was related to leaf water content and anatomy. Under drought, Rht‐B1c line was characterized by less decreased CO 2 assimilation, delayed non‐stomatal limitation of photosynthesis and higher instantaneous water use efficiency. The functional state of its photosynthetic apparatus was better preserved as evidenced by the less decreased actual quantum yield (Φ PSII ) and potential maximum quantum yield ( F v / F m ) of PSII , and the less increased quantum yield of non‐regulated energy dissipation (Φ NO ). Rht‐B1b line also tended to perform better than Rht‐B1a , but differences were less pronounced. Although the leaves of both dwarf lines were smaller, thicker and more pubescent, their water content was not higher in comparison with the tall line. Nevertheless, in Rht‐B1c, leaf thickness was less decreased and mesophyll cells were less shrunk under drought. The more effective performance of the photosynthetic machinery of dwarf lines under water deficit could be explained by a combination of morpho‐anatomical and metabolic characteristics.