Field measurements were made of leaf photosynthesis (A), stomatal conductance (g) and leaf water relations for sugar maple (Acer saccharum Marsh.) seedlings growing in a forest understory, small gap or large clearing habitat in southwestern Wisconsin, USA. Predawn water status, leaf gas exchange and plasticity in field and laboratory water relations characteristics were compared among contrasting light environments in a wet year (1987) and a dry year (1988) to evaluate possible interactions between light and water availability in these habitats. Leaf water potentials (Ψleaf) at predawn and midday were lower for clearing than gap or understory seedlings. Acclimation of tissue osmotic potentials to light environment was observed among habitats but did not occur within any of the habitats in response to prolonged drought. During a summer drought in 1988, decreases in daily maximum g (gmax) and maximum A (Amax) in clearing seedlings were correlated with predawn Ψleaf, which reached a seasonal minimum of –2.0 MPa. Under well-watered conditions, diurnal fluctuations in Ψleaf of up to 2.0 MPa in clearing seedlings occurred along with large midday depressions of A and g. In a wet year, strong stomatal responses to leaf-to-air vapor pressure difference (VPD) in sunny habitats were observed over nine diurnal courses of gas exchange measurements on seedlings in a gap and a clearing. Increasing stomatal limitations to photosynthesis appeared to be responsible for the reduction in A at high VPD for clearing seedlings. In understory seedlings, however, low water-use efficiency and development of leaf water deficits in sunflecks was related to reduced stomatal limitations to photosynthesis relative to seedlings in sunny habitats. Predawn Ψleaf and VPD appear to be important factors limiting carbon assimilation in sugar maple seedlings in light-saturating irradiances, primarily through stomatal closure. The overall results are consistent with the idea that sugar maple seedlings exhibit “conservative” water use patterns and have low drought tolerance. Leaf water relations and patterns of water use should be considered in studies of acclimation and species photosynthetic performance in contrasting light environments.