Improving water use efficiency (WUE) in grapevines is essential for vineyard sustainability under the increasing aridity induced by global climate change. WUE reflects the ratio between the carbon assimilated by photosynthesis and the water lost in transpiration. Maintaining stomata partially closed by regulated deficit irrigation or partial root drying represents an opportunity to increase WUE, although at the expense of decreased photosynthesis and, potentially, decreased yield. It would be even better to achieve increases in WUE by improving photosynthesis without increasing water loses. Although this is not yet possible, it could potentially be achieved by genetic engineering. This review presents current knowledge and relevant results that aim to improve WUE in grapevines by biotechnology and genetic engineering. The expected benefits of these manipulations on WUE of grapevines under water stress conditions are modelled. There are two main possible approaches to achieve this goal: (i) to improve CO2 diffusion to the sites of carboxylation without increasing stomatal conductance; and (ii) to improve the carboxylation efficiency of Ribulose-1,5-bisphosphate carboxylase/oxygenase (Rubisco). The first goal could be attained by increasing mesophyll conductance to CO2, which partly depends on aquaporins. The second approach could be achieved by replacing Rubisco from grapevine with Rubiscos from other C3 species with higher specificity for CO2. In summary, the physiological bases and future prospects for improving grape yield and WUE under drought are established.