Temporal and seasonal water deficit is one of the major factors limiting crop yield on the Canadian prairie. Selection for low carbon isotope discrimination (Δ13C) or high water-use efficiency (WUE) can lead to improved yield in some environments. To understand better the physiology and WUE of barley under drought conditions on the Canadian prairie, 12 barley (Hordeum vulgare L.) genotypes with contrasting levels of leaf Δ13C were investigated for performance stability across locations and years in Alberta, Canada. Four of those genotypes (‘CDC Cowboy’, ‘Niobe’, ‘170011’ and ‘Kasota’) were also grown in the greenhouse under well-watered and water-deficit conditions to examine genotypic variations in leaf Δ13C, WUE, gas exchange parameters and specific leaf area (SLA). The water-deficit treatment was imposed at the jointing stage for 10 days followed by re-watering to pre-deficit level. Genotypic ranking in leaf Δ13C was highly consistent, with ‘170011’, ‘CDC Cowboy’ and ‘W89001002003’ being the lowest and ‘Kasota’‘160049’ and ‘H93174006’ being the highest leaf Δ13C. Under field and greenhouse (well-watered) conditions, leaf Δ13C was significantly correlated with stomatal conductance (gs). Water deficit significantly increased WUE, with ‘CDC Cowboy’– a low leaf Δ13C genotype with significantly higher WUE and lower percentage decline in assimilation rate (A) and gs than the other three genotypes (‘Niobe’, ‘170011’ and ‘Kasota’). We conclude that leaf Δ13C is a stable trait in the genotypes evaluated. Low leaf Δ13C of ‘CDC Cowboy’ was achieved by maintaining a high A and a low gs, with comparable biomass and grain yield to genotypes showing a high gs under field conditions; hence, selection for a low leaf Δ13C genotype such as ‘CDC Cowboy’ maybe important for maintaining productivity and yield stability under water-limited conditions on the Canadian prairie.