Peanut (Arachis hypogaea L.) is commonly grown on sandy soils that are susceptible to water deficits. Because symbiotic nitrogen fixation in other grain legumes is especially sensitive to soil drying, the sensitivity of peanut nitrogen fixation to water deficits might be an important limitation on peanut production. This greenhouse study was undertaken to observe the response of nitrogen fixation (acetylene reduction) in six peanut cultivars to soil drying. In contrast to other grain legumes, peanut nitrogen fixation was relatively insensitive to soil drying. Acetylene reduction rates did not begin to decrease until soil water deficits had decreased to where leaf gas exchange was affected. These data indicated that restricted nitrogen fixation during drought stress is not likely to be a serious problem in peanut. Nevertheless, cultivar variation in drought sensitivity was identified indicating that genetic selection might further decrease the susceptibility of peanut nitrogen fixation to drought.