Zebra Finches (Poephila guttata) of arid Australia can breed continuously under favorable conditions. During droughts, however, breeding ceases but is said to begin again immediately after rain. We found that testis size in breeding birds did not change during, or between, reproductive cycles. Luteinizing hormone (irLH) levels in plasma, however, were significantly higher in males during early incubation (1.25 ng/ml), and in females during courtship (0.89 ng/ ml), than during other parts of the reproductive cycle. Plasma levels of the sex steroids were highest (1.06 ng/ml for androgen in males, 0.32 ng/ml for estrogens in females) at the same time that irLH levels were highest. Wild-caught Zebra Finches had, at capture, testes similar in size to those of aviary-breeding Zebra Finches, but after three weeks of dehydration (1 ml water/bird/week), testis size was significantly smaller and hematocrit was significantly higher: 54% vs. 50% for birds given unlimited access to water. When dehydrated birds were given unlimited access to water, testes grew significantly. Access to green grass or ex- posure to high relative humidity (85%) augmented the effects of the water on testis size. Spermatogenic activity in some dehydrated birds was high despite small gonad size; however, interstitial tissue was poorly developed, and plasma levels of sex steroids and irLH were low. We suggest that Zebra Finches normally maintain gonadal tissue in a functioning state unless severely dehydrated. Relief from dehydration is a necessary, but not sufficient, condition for the full expression of reproduction.