Besides the paucity of information on the effects of drought stress on photosynthesis and yield in sweet potato [Ipomoea batatas (L.) Lam.], available reports are also contradictory. The aim of this study was to shed light on the effects of long-term restricted water supply on shoot development, photosynthesis and storage root yield in field-grown sweet potato. Experiments were conducted under a rainout shelter where effects of restricted water supply were assessed in two varieties (Resisto and A15). Large decreases in stomatal conductance occurred in both varieties after 5 weeks of treatment. However, continued measurements revealed a large varietal difference in persistence of this response and effects on CO2 assimilation. Although restricted water supply decreased leaf relative water content similarly in both varieties, the negative effects on stomatal conductance disappeared with time in A15 (indicating high drought acclimation capacity) but not in Resisto, thus leading to inhibition of CO2 assimilation in Resisto. Chlorophyll a fluorescence measurements, and the relationship between stomatal conductance, intercellular CO2 concentration and CO2 assimilation rate, indicated that drought stress inhibited photosynthesis primarily through stomatal closure. Although yield loss was considerably larger in Resisto, it was also reduced by up to 60% in A15, even though photosynthesis, expressed on a leaf area basis, was not inhibited in this variety. In A15 yield loss appears to be closely associated with decreased aboveground biomass accumulation, whereas in Resisto, combined effects on biomass accumulation and photosynthesis per unit leaf area are indicated, suggesting that research aimed at improving drought tolerance in sweet potato should consider both these factors.