A study was conducted at the Iowa State University Hinds Irrigation Farm, Ames, IA during the summers of 1997 and 1998 to compare the Bt and non-Bt versions of two maize (Zea mays, L.) hybrids. The plants were grown in buried, one meter deep, containers filled with a Nicollet loam (Aquic Hapludoll) soil. A rainout shelter protected the plots from the interruption of water deficit by rainfall. Irrigation was scheduled so that the plants experienced water deficit during the peak egg hatch of the first and second European corn borer, Ostrinia nubilalis (Hubner) generations. Water deficit during the vegetative period delayed leaf appearance and tasseling, reduced the area of individual leaves and plant height, but did not affect total leaf number. Thermal time requirement per leaf was different for the two years due to the interactive effect of photoperiod and cool temperatures. The lowest grain yields were observed when water deficit was imposed around tasseling. Biomass yield was lowest with vegetative period water deficit, but there was also a significant reduction when water deficit was imposed during the reproductive period. The amount of stalk tunneling by corn borer larvae was not different between water deficit treatments, but Bt plants had significantly less tunneling by the second-generation larvae than non-Bt plants. Stressed and non-stressed plants differed significantly in leaf temperature, stomatal conductance and sap flow, but Bt and non-Bt plants did not. It was concluded that the introduction of the Bt gene into maize plants for a better resistance to European corn borer did not affect their water relations. Transpiration measured by the sap flow technique was well correlated with Penman potential evapotranspiration, suggesting that this method is more suitable than porometry or infrared thermometry for plant transpiration measurements under varying environmental conditions. A stress index was derived from transpiration measured 15 to 18 days after silking which could be used as a simple yield forecasting tool by decision makers.