Wheat (Triticum aestivum L.) cultivars grown in the southern Great Plains of the U.S.A. are exposed to a wide range of moisture conditions due to large fluctuations in the amount and frequency of rainfall. Yield stability under those conditions is therefore a desirable trait for wheat breeders. Our primary objective was to quantify various genetic parameters for grain production in drought-stressed and irrigated environments. We also attempted to predict and measure yield responses when selection is practiced in either drought-stressed or irrigated environments, or both. Seventy F2-derived lines from the cross, TAM W-101/Sturdy, were evaluated at Goodwell, OK, under irrigated and naturally drought-stressed conditions in 1987 and 1988. Genetic variance and heritability estimates were higher in the irrigated environment than in the drought-stressed environment. The genetic correlation coefficient for yields in the two environments was 0.20 +/- 0.16, indicating that selection of widely adapted genotypes requires testing in both environments. Based on the genetic variance/covariance structure of this particular population, the linear index which maximized the combined expected gain in both environments was 0.66Y1 + 0.34Y2, in which Y1 and Y2 are yields in the irrigated and drought-stressed environments. This index is not expected to apply across all populations; rather, it further supports the hypothesis that testing in either environment alone (drought stressed or irrigated) may not be most effective for increasing either mean productivity or yield under drought stress.