The greatest fear of global climate change is drought since in most areas where wheat is grownwater is the most important factor influencing wheat yield. Average wheat yield throughout the world is only30 -60% of the attainable yield potential because water shortage is the major factor preventing the realizationof maximum yield. Periods of drought alternating with short periods of available water are common conditionsto influence wheat productivity. Such conditions include variable frequency of dry and wet periods, intensityof drought, rate of drought onset and patterns of soil water deficit and/or atmospheric water deficit. It is thisdeficit and variable water conditions in semiarid environments that influence wheat productivity variously.This paper reviewed the physiological adaptation and benefits associated with deficit and variable water condi-tions. In addition, it also highlights the compensative effect of limited irrigation and breeding of new varietiesfor high water use efficiency (WUE) that could improve wheat productivity under water-limited environmentsin the semiarid regions. Considerable potential for further improvement in wheat WUE and productivity insemiarid environments seems to depend on effective conservation of moisture and effici ent use of this limitedwater such as soil fertility improvement, conservation tillage, residues and film mulch, rain water harvestingfor limited irrigation, and breeding for water saving varieties. Different crop, soil and water managementstrategies should be adjusted according to the conditions that prevail in various semiarid areas. By combiningsoil and water conservation approaches and adjusting the cropping system by growing drought-tolerant and wa-ter-saving cultivars, increase in wheat WUE and productivity could be achieved.