Exposure of plants to salt stress is often accompanied by reductions in leaf photosynthesis and in stomatal and mesophyll conductances. To separate the effects of salt stress on these quantities, a model based on the hypothesis that carbon gain is maximized subject to a water loss cost is proposed. The optimization problem of adjusting stomatal aperture for maximizing carbon gain at a given water loss is solved for both a non-linear and a linear biochemical demand function. A key novel theoretical outcome of the optimality hypothesis is an explicit relationship between the stomatal and mesophyll conductances that can be evaluated against published measurements. The approaches here successfully describe gas-exchange measurements reported for olive trees (Olea europea L.) and spinach (Spinacia oleraceaL.) in fresh water and in salt-stressed conditions. Salt stress affected both stomatal and mesophyll conductances and photosynthetic efficiency of both species. The fresh water/salt water comparisons show that the photosynthetic capacity is directly reduced by 30%–40%, indicating that reductions in photosynthetic rates under increased salt stress are not due only to a limitation of CO2diffusion. An increase in salt stress causes an increase in the cost of water parameter (or marginal water use efficiency) exceeding 100%, analogous in magnitude to findings from extreme drought stress studies. The proposed leaf-level approach can be incorporated into physically based models of the soil-plant-atmosphere system to assess how saline conditions and elevated atmospheric CO2 jointly impact transpiration and photosynthesis.