This study had the objective of evaluating the effect of water deficit on the Physiological Parameters and Water Use Efficiency on soybean plants under different planting densities. It was conducted during winter and summer seasons of 2014-2015. The different plant densities designated as D1, D2 and D3 (5, 10 and 15 cm between plants) under three watering regimes (W1,W2 and W3) irrigation every 7,14 and 21 days. The experimental design was a complete randomized blocks design in split trail with three replications. All physiological parameters (LAD, RGR,CGR, NAR) and relative water content of soybean plants tended to decrease with prolonged watering interval (W3) or in high planting density (D1).Water use efficiency for dry mater (WUEdm) was higher in moderate watering interval (W2) as compared to frequent and pronged watering regimes (W1 ,W3). An interaction treatment (W1D3) increased RGR,CGR, NAR while the highest WUEdm was recorded in (W2D3).the result revealed that, the improvement in water availability with low planting density stimulated plant growth and caused increase in dry matter accumulation and longer leaf area might explain the higher CGR, NAR. In conclusion, sowing soybean in wider spacing under frequent irrigation can increase most of the physiological characters measured in this investigation.