The effects of soil moisture (80%, 60% and 40% water holding capacity) on dry matter production and allocation, leaf morphological and physiological characteristics were examined in Adiantum reniforme var. sinensis, an endangered fern endemic to the Three Gorges region in southwest China. Drought stress decreased leaf growth and photosynthetic capacity, and hence reduced total mass, specific leaf area (SLA) and leaf area ratio (LAR). Dry matter allocation into the root fraction, however, increased with decreasing soil moisture. Leaf relative water content (RWC) decreased as soil water depletion, but the differences were insignificant. Such results might be the result of a physiological balance between the demand for water by the leaves and the water uptake from soil by the roots. The decrease in stomatal conductance (g_s) effectively controlled water loss and maintained intrinsic water use efficiency (WUE_i) under drought stress. The increase in proline content might contribute to osmotic adjustment, and hence sustained cytomembrane integrality in structure and function under drought conditions.