We quantified parameters for a model of leaf-level photosynthesis for olive, and tested the model against an independent dataset. Specific temperature-dependence parameters of the model for olive leaves were measured, as well as the relationship of the model parameters with area-based leaf nitrogen (N) content. The effect of soil water deficit on leaf photosynthesis was examined by applying two irrigation treatments to 29-year-old trees growing in a plantation: drip irrigation sufficient to meet the crop water requirements (I) and dry-farming (D). In both treatments, leaves had a higher photosynthetic capacity in April than in August. In August, photosynthetic capacity was lower in D trees than in I trees. Leaf photosynthetic capacity was linearly and positively related to leaf N content on an area basis (N_a) and to leaf mass per unit area (LMA), and the regression slope varied with irrigation treatment. The seasonal reduction in N_a was used in the model to predict photosynthesis under drought conditions. Olive leaves showed a clear limitation of photosynthesis by triose phosphate utilization (TPU) even at 40 °C, and the data suggest that olive invests fewer resources in TPU than other species. The seasonal decrease in photosynthetic capacity moderated the stomatal limitation to carbon dioxide (CO₂) fixation as soil water deficit increased. Further, it enabled leaves to operate close to the transition point between photosynthetic limitation due to RuBP carboxylation capacity and that due to RuBP regeneration capacity, and resulted in a near constant value of internal CO₂ concentration from April to August. Under well watered conditions, N use-efficiency of the olive leaves was enhanced at the expense of reduced water use-efficiency.