The effects of water deprivation on the activity of nodules of soyabean (Glycine max) have been investigated in controlled environments. The water potential of detached nodules was measured using a Wescor psychrometer and a specially designed ten chamber psychrometer; each chamber was capable of holding up to six nodules which allowed for simultaneous measurements of between ten and 60 nodules. Nitrogenase activity (acetylene reduction) and respiration of intact, undisturbed nodulated roots was measured in a flow-through gas system. The equilibration pattern of single nodules in a Wescor chamber showed a distinct biphasic pattern. Differences between the pseudo- and the true equilibrium values of water potential suggest that water potential gradients close to 01 MPa exist within the nodule tissue. Such gradients probably reflect histological discontinuities. When detached nodules were allowed to dry, decreases in water potential and diameter were accompanied by increases in the resistance to water vapour loss through diffusion. These changes provide evidence for anatomical modifications which might provide some regulation of water loss. During a 7 d period of water deprivation there was a close relationship between decreases in leaf and nodule water potential. Nitrogenase activity showed a 70% decrease during the first 4 d, whilst photosynthesis only declined by 5%. It is suggested that water stress exerts an influence on nitrogenase activity which is independent of the rate of photosynthesis; it acts directly on nodule activity through increases in the resistance to oxygen diffusion to the bacteroids. The data suggest that the linear relationship between oxygen diffusion resistance and water potential is more important than any reductions in photosynthate supply.