Water stress and nitrogen (N) availability are the main constraints limiting yield in durum wheat (Triticum turgidum L. var. durum). This work investigates the combined effects of N source (ammonium–NH4+, nitrate–NO3 or a mixture of both–NH4+:NO3) and water availability (well-watered vs. moderate water stress) on photosynthesis and water-use efficiency in durum wheat (cv. Korifla) flag leaves grown under controlled conditions, using gas exchange, chlorophyll fluorescence and stable carbon isotope composition (δ13C). Under well-watered conditions, NH4+-grown plants had lower net assimilation rates (A) than those grown with the other two N forms. This effect was mainly due to lower stomatal conductance (gs). Under moderate water stress, differences among N forms were not significant, because water regime (WR) had a stronger effect on gs and A than did N source. Consistent with lower gs, δ13C and transpiration efficiency (TE) were the highest in NH4+ leaves in both water treatments. These results indicate higher water-use efficiency in plants fertilized with NH4+ due to stomatal limitation on photosynthesis. Moreover, leaf δ13C is an adequate trait to assess differences in photosynthetic activity and water-use efficiency caused by different N sources. Further, the effect of these growing conditions on the nitrogen isotope composition (δ15N) of flag leaves and roots was examined. Water stress increased leaf δ15N in all N forms. In addition, leaf δ15N increased as root N decreased and as leaf δ13C became less negative. Regardless of WR, the leaf δ15N of NO3-grown plants was lowest. Based on stepwise and canonical discriminant analyses, we conclude that plant δ15N together with δ13C and other variables may reflect the conditions of N nutrition and water availability where the plants were grown. Thus well-watered plants grown with NH4+:NO3 resembled those grown with NO3, whereas under water stress they were closer to plants grown with NH4+.