Annual forage yield in the northern Great Plains depends primarily on quantity and temporal distribution of precipitation. This study was conducted to examine the effect of water deficit on yield, leaf area, and net assimilation rate (NAR) of three forage grasses under field conditions. The grasses, smooth bromegrass (Bromus inermisLeyss.) (Br), Altai wildrye [Leymus angustus(Trin.) Pilger] (AWr), and crested wheatgrass [Agropyron cristatum(L.) Beauv. spp. pectinatum(Bieb.) Tzvel.] (CWg), were chosen because of their contrasting morphologies. The grasses were grown on deep black soil (Melfort silty clay, Typic Cryoboroll) under two moisture regimes: DRY plots were covered by rain‐out shelters starting at the end of May, and IRR plots were watered when soil water potential averaged −0.07 MPa. Crested wheatgrass expanded leaf area more rapidly in spring than Br and AWr, and responded to increasing soil water deficits by sharply reducing its leaf area through senescence of older leaves. Altai wildrye developed its leaf area slowly, probably because more dry matter was required to produce a unit of leaf area. It responded to soil water deficit by reducing rate of leaf expansion. Smooth bromegrass developed its leaf area rapidly although somewhat later than CWg. The effect of soil water deficit on leaf expansion was less in Br than AWr, and its effect on reduction of leaf area through leaf senescence was less in Br than CWg. In late May, AWr yielded less than CWg but more than Br. At the end of June, yield of CWg was greater than both Br and AWr in 1983, and greater than AWr but similar to Br in 1984. Altai wildrye recovered most rapidly after clipping among the species in both years but yielded more regrowth only in 1984. No interaction was found between moisture regime and species for either leaf area or yield on any of the sampling dates, probably because soil water deficits developed gradually under the conditions of this experiment, thus minimizing the effects of the different growth patterns. Soil water deficit affected leaf area proportionately more than NAR in AWr and CWg but not in Br. The findings suggest that the relative effect of drought on these two yield components depends on species and environment.