Agave salmiana Otto ex Salm-Dyck, a crassulacean acid metabolism plant that is adapted to water-limited environments, has great potential for bioenergy production. However, drought stress decreases the requirement for light energy, and if the amount of incident light exceeds energy consumption, the photosynthetic apparatus can be injured, thereby limiting plant growth. The objective of this study was to evaluate the effects of drought and re-watering on the photosynthetic efficiency of A. salmiana seedlings. The leaf relative water content and leaf water potential decreased to 39.6 % and −1.1 MPa, respectively, over 115 days of water withholding and recovered after re-watering. Drought caused a direct effect on photosystem II (PSII) photochemistry in light-acclimated leaves, as indicated by a decrease in the photosynthetic electron transport rate. Additionally, down-regulation of photochemical activity occurred mainly through the inactivation of PSII reaction centres and an increased thermal dissipation capacity of the leaves. Prompt fluorescence kinetics also showed a larger pool of terminal electron acceptors in photosystem I (PSI) as well as an increase in some JIP-test parameters compared to controls, reflecting an enhanced efficiency and specific fluxes for electron transport from the plastoquinone pool to the PSI terminal acceptors. All the above parameters showed similar levels after re-watering. These results suggest that the thermal dissipation of excess energy and the increased energy conservation from photons absorbed by PSII to the reduction of PSI end acceptors may be an important acclimation mechanism to protect the photosynthetic apparatus from over-excitation in Agave plants.