The capacity of plants to tolerate high levels of salinity depends on the ability to exclude salt from the shoot, or to tolerate high concentrations of salt in the leaf (tissue tolerance). It is widely held that a major component of tissue tolerance is the capacity to compartmentalize salt into safe storage places such as vacuoles. This mechanism would avoid toxic effects of salt on photosynthesis and other key metabolic processes. To test this, the relationship between photosynthetic capacity and the cellular and subcellular distribution of Na+, K+ and Cl- was studied in salt-sensitive durum wheat (cv. Wollaroi) and salt-tolerant barley (cv. Franklin) seedlings grown in a range of salinity treatments. Photosynthetic capacity parameters (Vcmax, Jmax) of salt-stressed Wollaroi decreased at a lower leaf Na+ concentration than in Franklin. Vacuolar concentrations of Na+, K+ and Cl- in mesophyll and epidermal cells were measured using cryo-scanning electron microscopy (SEM) X-ray microanalysis. In both species, the vacuolar Na+ concentration was similar in mesophyll and epidermal cells, whereas K+ was at higher concentrations in the mesophyll, and Cl- higher in the epidermis. The calculated cytoplasmic Na+ concentration increased to higher concentrations with increasing bulk leaf Na+ concentration in Wollaroi compared to Franklin. Vacuolar K+ concentration was lower in the epidermal cells of Franklin than Wollaroi, resulting in higher cytoplasmic K+ concentrations and a higher K+ : Na+ ratio. This study indicated that the maintenance of photosynthetic capacity (and the resulting greater salt tolerance) at higher leaf Na+ levels of barley compared to durum wheat was associated with the maintenance of higher K+, lower Na+ and the resulting higher K+ : Na+ in the cytoplasm of mesophyll cells of barley.