The effects of a moderate soil water deficit on several shoot growth variables (1st and 2nd order shoot growth and final leaves number, final height and final number of 2nd order shoots) and on net photo- synthesis were studied in young peach trees during the two years following plantation (January 2014). Trees were either fully irrigated (C), subjected to moderate water deficit (RDI) or subjected to moderate water deficit and associated with a grass-legume mixture on the entire orchard floor (RDI +G). Irrigation was scheduled according to soil water potential target ranges in order to keep C trees above −0.02 MPa, i.e. at field capacity, and RDI and RDI + G trees between −0.04 MPa and −0.06 MPa. The level of water deficit obtained was moderate but yet significantly reduced by 50% overall tree growth in 2014 in RDI. This reduction was enhanced when water deficit lasted longer and when it was associated with grass in RDI + G. No reduction in growth variables occurred in RDI in 2015 due to the shorter duration of water deficit. Overall reduction was observed in 2015 in RDI + G mostly due to a carry-over effect of the pre- vious year. Net photosynthesis was reduced by the longer and more intense water deficit in 2014, but was not reduced during the soil water deficit in 2015. An indicator of plant process sensitivity to water deficit, taking into account the variable reduction with regards to the control, the water deficit intensity and its duration was used to classify shoot growth variables and net photosynthesis according to their sensitivity to water deficit. Variables could be classified according to the following order of ascending sensitivity: net photosynthesis <1st order final leaf number < final tree height <1st order final shoot length <2nd order final leaf number <2nd order final shoot number <2nd order final shoot length. Applying a moderate water deficit combined with full grass cover drastically reduces overall tree size due to grass competition