Drought strongly influences plant productivity, suggesting that water limitation has shaped the evolution of many plant physiological traits. One functional strategy that plants employ to cope with decreasing water availability is drought escape. For drought-escaping species, high metabolic activity (gas exchange) and rapid growth are hypothesized to confer a fitness advantage, because this enables a plant to complete its life cycle before the most intense period of drought. By growing an annual grass species (Avena barbata) under well-watered or water-limited conditions in a greenhouse, we directly tested whether high photosynthesis, increased stomatal opening, and early flowering are adaptive under drought. We measured phenotypic selection on instantaneous gas exchange and flowering time as well as the underlying biochemical traits that regulate photosynthesis. We found strong selection for earlier flowering in the dry environment, but no evidence that increased photosynthesis was adaptive under drought. Photosynthetic rate (A) and stomatal conductance (g_s) were both adaptively neutral in the dry environment. Increased photosynthetic capacity (A_max) was maladaptive in the dry environment, perhaps because of the respiratory cost associated with maintaining excess enzyme and substrate capacity. There was no correlational selection on the combination of physiology and flowering time in the dry environment, suggesting that accelerated development and high gas exchange may not need to be tightly linked to promote drought escape. In contrast, there was selection for both high photosynthetic function (A_max and A) and early flowering in the well-watered environment. These combinations of traits may have been favored because they maximize both energy and time available for reproduction. Our results suggest that the benefit of increased photosynthesis for plant fitness may be strongest in the absence of drought stress.