There is an increasing need to improve water use efficiency (WUE) of the crops under water-limited and irrigated environments. WUE is basically defined as total biomass produced per unit water consumed. Gas exchange efficiency, defined as the ratio of photosynthesis to transpiration (A/E), has been demonstrated to be a good estimate of the WUE at the canopy level in grain sorghum. A controlled environment study was conducted to evaluate A/E and WUE in twelve F1 hybrids resulting from a 4 x 4 diallel crossing pattern. The parents, TX430, TX7078, SC414 and R9188, were evaluated prior to this experiment under dryland field condition and chosen based on their contrasting A, E, and A/E. Significant differences for A, E, A/E, and WUE were found among the hybrids and their parents. TX7078 and all its hybrids showed the highest A and E values, and the lowest A/E ratios. TX430 and its hybrids produced high A and low E values, therefore these genotypes had high A/E values. The slopes of A regressed by E estimated that TX430 and its hybrids assimilated approximately 30% more carbon per unit water transpired than TX7078 and its F1's. With few exceptions, WUE correlated well with the A/E ratios. Genetic analyses of general and specific combining ability will be presented.