This study reports the variations of leaf water potential (LWP) and canopy temperature (T-c) of irrigated and droughted field-grown olive (Olea europaea L. cv. Memecik) trees. The trees were subjected to two irrigation treatments: irrigated at 100% of crop evapotranspiration (control), and a non-irrigated (stressed) treatment. The diurnal behavior of LWP and T-c in response to water stress and the evaporative demand of the atmosphere was studied for 4 consecutive days in August 2009. In the control, canopy temperature was found to be lower than the air temperature (T-a), but in the stress treatment, canopy temperature was higher than air temperature. The maximum difference between the canopy temperatures of the two treatments was 2.7 degrees C. In the control treatment, midday LWP values were about -2.5 MPa, while in the stress treatment, they fell below -4MPa. The greatest difference between treatments in both canopy temperatures and LWP occurred around midday. A negative linear relationship was found between (T-c-T-a) and LWP, and between vapor pressure deficit (VPD) and LWP. VPD values ranged from 0.6-3.9 kPa. No significant linear relationship was found between T-c-T-a and VPD. Increase in water deficit resulted in an increase in canopy temperature, which eventually exceeded ambient air temperature and may have negatively affected leaf function and crop productivity. Temperature gradients also influenced the water potential of olive trees.