Malt barley is typically grown in dryland conditions in South Africa. It is an important grain after wheat, but little is known about its water requirements and, most importantly, how it responds to water stress. Determining when water stress sets in and how malt barley responds to water deficit during its growing season is crucial for improved management of crop water requirements. The objectives of this study were to evaluate the response of transpiration (T), stomatal conductance (SC), and leaf water potential (LWP) to water stress for different growth stages of malt barley and to characterise water stress to different levels (mild, moderate, and severe). This was achieved by monitoring the water stress indicators (soil- and plant based) under greenhouse conditions in well-watered and water-stressed lysimeters over two seasons. Water stress was characterised into different levels with the aid of soil water content 'breaking points' procedure. During the first season, at the end of tillering, flag leaf, and milk/dough growth stages, which represent severe water stress, plant available water (PAW) was below 35%, 56%, 14%, and 36%, respectively. LWP responded in accordance to depletion of soil water during the growing season, with the lowest recorded value to -5.5 MPa at the end of the milk/dough growth stage in the first season. Results also show that inducing water stress resulted in high variability of T and SC for both seasons. In the second season, plants severely stressed during the anthesis growth stage recorded the least total grains per pot (TGPP), with 29.86 g of grains. The study suggests that malt barley should be prevented from experiencing severe water stress during the anthesis and milk/dough stages for optimum malt barley production. Quantification of stress into different levels will enable the evaluation of the impact of different levels of stress on the development, growth, and yield of barley.