Measurements of photosynthetically active radiation (PAR), leaf photosynthesis, canopy leaf area index (LAI) and crop yield were carried from flowering to maturity to study the effects of tree shading on crop yield in a Paulownia-wheat intercropping system in China. We found that the tree shading reduced the amount of incoming PAR within the intercropping system by 22%, 44% and 56% during flowering, grain-filling and maturing, respectively. The amount of PAR intercepted by the wheat crop inside the intercropping system was 34%, 55% and 68% less than the crop outside the intercropping system during flowering, grain-filling and maturing. Estimates of PAR-saturated leaf photosynthetic rate were not affected by tree shading, and the differences between the wheat yield inside the intercropping system and outside the intercropping system can be explained by the difference in the amount of PAR intercepted. Total grain numbers and grain dry weight per 1000 grains were linearly correlated with the amount of PAR intercepted during 7 days prior to anthesis and during anthesis and grain-filling, respectively. As compared with the wheat crop outside the intercropping system, grain numbers and grain dry weight were reduced by 36% and 25%, respectively. As a result wheat yield inside the intercropping system was 51% lower than that outside the intercropping system. Our results suggest a much higher reduction in crop yield and much smaller economic gain of the Paulownia-wheat intercropping system than previous studies on the similar Paulownia-wheat intercropping systems in China.