The leaf gas exchange of mature olive trees (Olea europaea L.) was characterized over a wide range of water deficits in the field during 1998, in Cordoba, Spain. Leaf photosynthesis (A) and stomatal conductance (gl) responded diurnally and seasonally to variations in tree water status and evaporative demand. In the absence of water stress, A and gl were generally high during autumn and low in days of high vapour pressure deficits (VPD). Leaf A varied between 0 and 2 µmol m−2 s−1 under severe water deficits that lowered the stem water potential (Ψx) to −8·0 MPa, but recovered rapidly following rehydration. Transpiration efficiency (TE) was curvilinearly related to VPD and not influenced by water deficits except in cases of severe water stress, where low TE values were observed at Ψx below −4 MPa. Three models of leaf conductance were calibrated and validated with the experimental data; two were based on the model proposed by Leuning (L) and the other was derived from the widely used Jarvis (J) model. The L models performed better than the J model in two validation tests. The scatter of the predictions and the limited accuracy of all three models suggest that, in addition to the physiological and environmental variables considered, there are additional endogenous factors influencing the gl of olive leaves.