Shrubland ecosystems play an important role in the hydrology of the inter-mountain basins of the United Sates. Our objective was to investigate the environmental drivers causing difference in leaf physiological responses of three dominant species, Artemisia tridentata var vaseyana (mountain big sagebrush), Lupinus argentus (lupine) and Elymus smithii (western wheatgrass) across a prescribed fire chronosequence. We hypothesized that (1) the youngest stand will be more susceptible to drought as compared to the older stands, and (2) sagebrush has physiological mechanisms to improve drought tolerance in comparison to lupine and western wheatgrass. The measurements were conducted on three stands ranging in age from 7 to 39 years near the Sierra Madre Mountains, Wyoming, USA. We measured the response of leaf photosynthesis to light and CO₂ concentration, chlorophyll fluorescence, leaf water potential, leaf nitrogen and carbon content and specific leaf area during the summers of 2004-2006. Our results show that in all three species biochemical and photochemical parameters showed greater response to environmental drivers such as water availability in the youngest stand as compared to the older stands, supporting Hypothesis 1. Rate of electron transport and net photosynthesis decreased with increasing age in all three plant species. Specific leaf area of sagebrush was less variable among different ages and seasonally as compared to lupine and western wheatgrass. Lupine and western wheatgrass had higher net photosynthesis than sagebrush under high water availability but were less drought tolerant, supporting Hypothesis 2. These parameters will be incorporated in a model to explain why sagebrush ecosystem carbon and water fluxes are driven by soil and atmospheric drought.