Phlomis fruticosa is one of the main species of post-fire Mediterranean communities, occupying areas with post-fire grazing or altered precipitation pattern and consequently water stress imposed on seedlings of co-occurring species. Seedlings of woody perennials often differ from their mature individuals regarding their resistance of photosynthetic performance to environmental stresses. Such differences have been reported for tree species but there is a lack of information regarding shrub species. In the present study, we tried to detect changes in (PSII) activity imposed by water stress in P. fruticosa seedlings as well as its capability for recovery after rehydration. Maximum PSII photochemical efficiency decreased only under severe water stress exactly as in mature plants in the field. However, leaf chlorophyll (Chl) content was almost stable regardless of leaf relative water content (RWC). We assume that the photoprotective chlorophyll loss process, reported for many mature Mediterranean species (including P. fruticosa), has not yet been developed at the seedling stage. On the other hand, photoprotection through an increase of the relative amount of non-QB-reducing centers was found during dehydration. Non-photochemical quenching (NPQ) contributed to protection from photodamage until moderate water stress but was significantly suppressed under severe water stress. Both processes were reversed after rehydration. The above characteristics enabled seedlings not only to survive during aggravating drought but also to maintain a considerable part of their effective quantum yield and perform significant electron transport even at extremely low relative water content (RWC). This was confirmed with measurements in a semi-natural environment (pots) and under real steady state conditions regarding adaptation of the photosynthetic machinery to prevailing light intensities.