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Widespread mortality of eastern hemlock (Tsuga canadensis [L.] Carr.) has been occurring due to the introduction of hemlock woolly adelgid (Adelges tsugae Annand) (HWA), threatening millions of hectares of hemlock-dominated forests in the eastern United States. HWA feeds at the base of needles and removes stored carbohydrates, which can impact leaf-level physiology, contributing to the decline of the tree. However, these physiological mechanisms in HWA-infested hemlocks are still not clearly understood. We investigated hemlock leaf physiology year-round at three forested sites with various degrees of infestation. At each site, half the trees were treated with imidacloprid (Merit® 2 F, Bayer, Kansas City, MO, USA) while the rest were left untreated. Imidacloprid is widely used to control HWA but can itself have phytotoxic effects. After one growing season, there was an increase in photosynthetic rates (7.5%, p = 0.0163) and stomatal conductance (7.1%, p = 0.0163) across sites in the trees treated with imidacloprid. After two years, the imidacloprid treatment also increased bud break from 22.5% to 88.7% at Fishburn (the most severely impacted site) and from 22.7% to 58.9% at Mountain Lake (the least impacted site), and slightly increased chlorophyll fluorescence for treated trees at Fishburn. Chemical treatment also slightly increased water use efficiency at Mountain Lake. These results suggest that HWA is causing tree mortality largely through a reduction in leaf area caused by decreasing bud break and also by a slight, but significant, reduction in leaf-level photosynthesis and stomatal conductance.