We investigated the effects of UV-B radiation and water stress on the mono- and sesquiterpenes produced by lemon verbena (Aloysia citriodora) which is native to semi-arid, mountainous regions of Argentina, Chile and Peru. These compounds are recognized for their activity in a variety of ecological roles such as feeding deterrents, antimicrobial agents, pollination attractants, and allelopathic chemicals. The response of known photoprotective compounds such as flavanoids and anthocyanins to UV-B has been intensively studied, however little is known about how UV-B radiation affects the synthesis of other carbon-based secondary metabolites. The objective of our study is to elucidate the effect of UV-B and drought stress on the foliar concentration and emission of terpenes in A. citriodora. Plants were grown in the field in UV-B exclusion experiments. Foliar concentrations of terpenes were analyzed using gas chromatography-mass spectrometry (GC-MS) and emissions were collected from intact leaves and analyzed with a thermal desorption GC-MS system. The foliar concentrations of monoterpenes (e.g., limonene, p=.02) were greater when plants were exposed to UV-B, while water stress decreased foliar concentrations of monoterpenes (e.g., citral, p=.04). Terpene emissions were greater in plants not exposed to UV-B and were higher in water-stressed plants. There were no significant interactions between water and UV-B treatment for foliar or emitted terpenes. Furthermore, these changes in carbon allocation happened in the absence of any permanent damage to photosystem II as evidenced by chlorophyll fluorescence measurements. Since terpenes are important in ecological interactions at multiple trophic levels, the role of light- or stress-induced alteration in their synthesis and accumulation should be incorporated in theoretical models of plant defense and carbon allocation.