A study was conducted with the objective of improvement of water use efficiency (WUE) and yield of winter wheat for Lowland Dryland Farming systems through a breeding approach. Various genotypes were screened in 1988 for rate of water loss of excised leaves (RWL) , followed by inter-crossing of diverse parents in 1993. Analysis of the relationship between RWL and yield components and plant traits demonstrated significant differences in RWL among genotypes. Under most circumstances, RWL was correlated negatively with yield and grain weight, and positively with plant height. The results demonstrated a basis for simultaneous selection for high yield and low RWL. It was found that genotypic rank varied with the duration of water loss. Correlation between RWL and yield was reduced by extended water loss duration. Analysis of the genetic variation and segregation of RWL of progenies and the effect of simultaneous screening for RWL and agronomic traits showed that good lines with improved yield and water use p A study was conducted with the objective of improvement of water use efficiency (WUE) and yield of winter wheat for Lowland Dryland Farming systems through a breeding approach. Various genotypes were screened in 1988 for rate of water loss of excised leaves (RWL), followed by inter-crossing of diverse parents in 1993. Analysis of the relationship between RWL and yield components and plant traits demonstrated significant differences in RWL among genotypes. RWL was correlated negatively with yield and grain weight, and positively with plant height. The results demonstrated a basis for simultaneous selection for high yield and low RWL. It was found that genotypic rank varied with the duration of water loss. Correlation between RWL and yield was reduced by extended water loss duration. Analysis of the genetic variation and segregation of RWL of progenies and the effect of simultaneous screening for RWL and agronomic traits showed that good lines with improved yie ld and water use p