Repetitive heat and drought stress conditions have a significant impact on quantity and quality of barley (Hordeum vulgare L.) production in most regions of the world. Objective of this study was to determine the relationships between photosynthetic performance index (PI ABS), water use (WU), grain yield-based water use efficiency (WUE G), and grain yield per pot (GYP) of winter barley cultivars grown in a pot trial under short-term drought stress conditions and grain yield and its stability from the multi-environmental field trials. Ten winter barley cultivars were examined in two water treatments. One treatment was well watered, while the second treatment was subjected to short-term stress caused by deficiency of water in the stages of full tillering, beginning of heading, and grain filling. PI ABS was measured at full tillering stage while WU, WUE G, and GYP of barley cultivars were estimated after the whole vegetative cycle. Also, multi-environmental field trials with the same winter barley cultivars were carried out during 4 yr (2004-2007) and 3 yr (2009-2011) with two sowing densities (300 and 450 seeds m-2) on multiple locations in the lowland part of the Republic of Croatia. ANOVA showed highly significant (P ≤ 0.001) cultivar effect for all of the examined traits in the pot trial. PI ABS of cultivars in both treatments was in a negative nonsignificant correlation with grain yield and grain yield stability (ecovalence) of the same cultivars in multi-environmental field trials. Winter barley cultivars with higher WU and WUE G also had higher values of grain yield, and harvest index observed on the basis of the pot trial. WU, WUE G, and GYP of 10 barley cultivars in pot trial showed highly positive phenotypic correlation with grain yield of all eight and 10 barley cultivars in the multi-environmental field trials. These results suggests that WU and WUE G could be good indicators for preliminary selection of modern, high yielding, and stable winter barley genotypes which have better water management capabilities.