We compared effects of different growing water potential conditions on physiological and morphological water–use properties of Sabina vulgaris Ant., which is an evergreen shrub that is widely distributed in arid and semi-arid environments of the Mu Us Sandy Land, China. Measurements were taken of cuttings grown for eight years under -0.02 MPa (control), -0.10 MPa (moderate water stress), and -0.34 MPa (severe water stress) water potential conditions. The transpiration rate (T_r) under moderate stress was significantly lower than that under severe stress and control water conditions (49% and 45% lower, respectively, than severe stress and the control on average). The leaf-specific hydraulic conductivity (LSC) in shrubs growing under moderate water stress was also significantly lower than for those under the severe water potential condition. In contrast, S. vulgaris growing under severe water stress had less leaf biomass than under moderate stress or control conditions. These results suggest that S. vulgaris growing under moderate water stress tends to show a reduced transpiration rate derived from its low LSC; therefore it avoids water loss in response to chronic water stress, while plants growing under severe water stress tends to reduce water loss through decreased leaf biomass. These results suggest that S. vulgaris has a high capacity for acclimation to different water potential conditions through physiological and morphological flexibility.