Perennial rhizomatous grasses are regarded as leading energy crops due to their environmental benefits and their suitability to regions with adverse conditions. In this paper, two different experiments were carried out in order to study the salinity (S) and water stress (WS) effects on biomass production in giant reed (Arundo donax L.). In Experiment 1, eight clones of giant reed were subjected to four salinity (S) and water stress (WS) treatments: (1) well watered with non-saline solution, (2) water stress with non-saline solution, (3) well watered with saline solution and 4) water stress with saline solution. In Experiment 2, five clones of giant reed were subjected to increasing S levels in two locations: University of Catania (UNICT-Italy) (1) well watered with non-saline solution and (2) well watered with mild saline solution; and University of Barcelona (UB-Spain) (3) well watered with non-saline solution and (4) well watered with severe saline solution. Photosynthetic and physiological parameters as well as biomass production were measured in these plants. According to our data, giant reed seems to be more tolerant to S than WS. Both stresses mainly affected stomatal closure to prevent dehydration of the plant, eventually decreasing the photosynthetic rate. The differential performance of the giant reed clones was ranked according to their tolerance to S and WS by using the Stress Susceptibility Index. ‘Agrigento’ was the most WS resistant clone and ‘Martinensis’ was the most S resistant. ‘Martinensis’ and ‘Piccoplant’ were found to be the most suitable clones for growing under both stress conditions. Moreover, ‘Fondachello’, ‘Cefalú’ and ‘Licata’ were the most resistant clones to increasing S levels.