We have investigated the water use efficiency of whole plants and selected leaves and allocation patterns of three wheat cultivars (Mexipak, Nesser and Katya) to explore how variation in these traits can contribute to the ability to grow in dry environments. The cultivars exhibited considerable differences in biomass allocation and water use efficiency. Cultivars with higher growth rates of roots and higher proportions of biomass in roots (Nesser and Katya) also had higher leaf growth rates, higher proportions of their biomass as leaves and higher leaf area ratios. These same cultivars had lower rates of transpiration per unit leaf area or unit root weight and higher biomass production per unit water use. They also had higher ratios of photosynthesis to transpiration, and lower ratios of intercellular to external CO2 partial pressure. The latter resulted from large differences in stomatal conductance associated with relatively small differences in rates of photosynthesis. There was little variation between cultivars in response to drought, and differences in allocation pattern and plant water use efficiency between cultivars as found under well‐watered conditions persisted under dry conditions. At the end of the non‐watered treatment, relative growth rates and transpiration rates decreased to similar values for all cultivars. High ratios of photosynthesis to transpiration, and accordingly high biomass production per unit of transpiration, is regarded as a favourable trait for dry environments, since more efficient use of water postpones the decrease in plant water status.